* AstraZeneca rejects sweetened Pfizer offer
* AT&T to buy DirecTV for $48.5 billion
* Futures off: Dow 33 pts, S&P 4.5 pts, Nasdaq 7.75 pts
By Chuck Mikolajczak
NEW YORK, May 19 U.S. stock index futures fell
on Monday, on the heels of back-to-back weekly declines for the
S&P 500 as investors grew cautious over stock valuations with
indexes near record levels amid mixed economic data.
* U.S. listed shares of AstraZeneca slumped
11.6 percent to $71 in premarket trade after the British
drugmaker rejected a sweetened and "final" merger offer from
Pfizer which would have created the world's largest
pharmaceuticals group. Pfizer shares advanced 2.2 percent to
$29.77 before the opening bell.
* AT&T lost 2.1 percent to $35.95 in premarket trade
after the telecom said it will acquire DirecTV for $48.5
billion, highlighting AT&T's pressing need for fresh avenues of
growth beyond the maturing U.S. cellular business. DirecTV
shares edged up 0.1 percent to $86.25 in premarket.
* Equities have come under pressure recently, with
consecutive weekly declines for the first time since January as
investors have become leery of growth prospects as a result of
mixed economic data.
* Small-cap stocks, often seen as the first beneficiary of
growth, have tumbled. The small-cap Russell 2000 index
has approached correction territory, defined as a decline of 10
percent from a recent high, several times only to bounce back
* The defensive posture by investors has been reflected by a
sector rotation into groups such as utilities, telecoms and
energy, which have outperformed the broader S&P 500 over the
past three months.
* S&P 500 e-mini futures lost 4.5 points and were
roughly even with 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 e-mini
futures declined 33 points and Nasdaq 100 e-mini futures
lost 7.75 points.
* Earnings season will effectively draw to a close this
week, with 23 companies scheduled to report, including retailers
Home Depot and Lowe's Cos.
* Of 464 companies in the S&P 500 that have reported
earnings so far, 69.2 percent beat expectations, above the
long-term average of 63 percent and the 66 percent average over
the past four quarters.
* European equities slid on Monday, pulled down by
AstraZeneca after it rejected Pfizer's takeover bid, and
by Deutsche Bank as a capital increase weighed on
* Asian share prices eased on Monday as investors waited to
see if the world's major central banks will continue to keep
monetary policy easy and in some cases loosen further.
(Reporting by Chuck Mikolajczak; Editing by Bernadette Baum)