* US Airways and American approve merger
* Cisco, GM results hurt by Europe weakness
* Berkshire and 3G Capital to buy Heinz, shares soar
* Futures off: Dow 36 pts, S&P 4 pts, Nasdaq 9 pts
By Rodrigo Campos
NEW YORK, Feb 14 U.S. stocks were set to dip at
the open Thursday, in the wake of weaker-than-expected growth
data from Europe and Japan, though news on mergers and
acquisitions may lead some investors to see further value in the
market even after its recent gains.
Though weakness in Europe has persisted over recent
quarters, its implications for global growth and U.S. corporate
profits spurred some profit-taking on Wall Street.
A contraction of 0.6 percent in gross domestic product in
the euro zone was the steepest for the bloc since the first
quarter of 2009, while Japan's GDP shrank 0.1 percent in the
fourth quarter, crushing expectations of a modest return to
The S&P 500 has gained 6.6 percent so far this year, though
a dearth of fresh incentives has kept trading thin over the past
U.S. data showed the number of Americans filing new claims
for unemployment benefits fell more than expected in the latest
That suggests the job market is improving, said Peter
Cardillo, chief market economist at Rockwell Global Capital in
"But it won't be much of a catalyst for the market this
morning because of ... the news out of Europe," he said.
Cardillo said a weaker euro, down 0.8 percent versus the
U.S. dollar, was also a downward pressure on markets.
Shrinking European economies translated to a 5-percent drop
in revenue from the region for Cisco Systems, which
nonetheless beat estimates as it reported its results Wednesday.
The company's shares pared a more than 2 percent earlier decline
to trade 0.6 percent lower before the bell.
General Motors Co reported a weaker-than-expected
fourth-quarter profit on Thursday, also citing bigger losses in
Europe alongside lower prices in its core North American market.
S&P 500 futures fell 4 points and were below fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures fell 36
points, and Nasdaq 100 futures lost 9 points.
Merger and acquisition activity indicated investors saw
value in the market even after its recent gains.
H.J. Heinz Co shares jumped 20 percent in premarket
trading after it said that Warren Buffett's Berkshire Hathaway
and 3G Capital will buy the company for $72.50 a share,
or $28 billion including debt.
American Airlines and US Airways Group said they
plan to merge in a deal that will form the world's biggest air
carrier, with an equity valuation of about $11 billion. US
Airways shares rose 3.5 percent in premarket trading.
Nvidia shares fell 2.5 percent in premarket trading
after the chip maker's revenue outlook missed expectations on
Wednesday, pointing to a slowing PC industry and slower
production of tablets using its chips.
On the other hand, shares of the world's largest chip gear
maker Applied Materials rose 2 percent premarket
following a better-than-expected earnings report and outlook.
Best Buy shares fell 2.8 percent in premarket
trading; sources said on Wednesday the electronics retailer's
founder may scrap a buyout bid and instead line up investors to
take a minority position.
U.S. stocks closed little changed in light trading
Wednesday, as investors remained cautious after the S&P 500
index hit its highest intraday level since November 2007.