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U.S. Index Futures Fall on Emerging-Market Currencies

Jan. 24 (Bloomberg) -- U.S. stock-index futures retreated, with the Standard & Poor’s 500 Index heading for a second week of losses, amid a selloff in emerging-market currencies.

International Game Technology tumbled 10 percent in early New York trading after the maker of slot machines posted first- quarter profit that missed analysts’ projections. Microsoft Corp. gained 2.6 percent after the world’s largest software maker reported record revenue that also exceeded analysts’ estimates. Starbucks Corp. rose 1.4 percent after the coffee- shop chain posted quarterly profit that beat forecasts.

Futures on the S&P 500 expiring in March retreated 0.7 percent to 1,811.2 at 7:34 a.m. in New York. Dow Jones Industrial Average contracts slid 105 points, or 0.7 percent, to 16,046 today.

“You’ve had a massive selloff in these emerging-market currencies,” Nick Xanders, a London-based equity strategist at BTIG Ltd., said by telephone. “Ruble, rupee, real, rand: they’ve all fallen and the main cause has been tapering. A lot of companies that have benefited from emerging-markets growth are now seeing it go the other way.”

Russia’s ruble dropped 1.1 percent today, extending its depreciation this year to 4.7 percent. The Indian rupee weakened 1.2 percent, while South Africa’s rand sank 1.3 percent to its lowest since October 2008. The Turkish lira plunged to a record low versus the U.S. dollar and the euro.

Argentina’s Devaluation

The Argentinian peso slumped yesterday after the government allowed the currency to devalue by reducing support in the foreign-exchange market. Investors have lost confidence in some of the biggest developing nations, extending the rout in emerging-market currencies that began last year when the Federal Reserve signaled it would slow the pace of its monthly purchases of Treasuries and mortgage bonds.

The S&P 500 fell 0.9 percent yesterday and the Dow dropped to a one-month low after a gauge of manufacturing activity in China unexpectedly contracted. The S&P 500 has declined 0.6 percent so far this week, heading for its first consecutive weekly losses since the middle of December.

Ten companies in the S&P 500, including Procter & Gamble Co. and Bristol-Myers Squibb Co. report their results today. Of the 112 index members that have released earnings so far this season, 73 percent have beaten estimates for profit and 67 percent have exceeded sales projections, according to data compiled by Bloomberg.

Slot Machines

International Game Technology tumbled 10 percent to $15.85. The Las Vegas-based company posted earnings of 25 cents a share, missing the average analyst estimate by 6 cent. It also reported revenue during the period of $541.2 million, falling short of the $556.7 million that analysts had projected.

Intuitive Surgical Inc. lost 5.9 percent to $413.27. The maker of a robotic-surgery device reported that fourth-quarter sales of systems decreased by 23 percent from a year earlier.

Microsoft gained 2.6 percent to $37 after reporting revenue that climbed 14 percent to $24.5 billion in the three months ended Dec. 31. Analysts had predicted sales of $23.7 billion, according to data compiled by Bloomberg. Customers flocked to game consoles and cloud software last quarter, the company said.

Starbucks rose 1.4 percent to $74.39. The Seattle-based company reported net income yesterday that climbed 25 percent, beating analysts’ estimates.

Juniper Networks Inc. rallied 6.3 percent to $27.65. The networking-equipment maker reported sales that exceeded analysts’ estimates. Revenue in the fourth quarter increased 12 percent to $1.27 billion from $1.14 billion a year earlier, the Sunnyvale, California-based company said yesterday in a statement. Analysts had predicted sales of $1.22 billion.

McKesson Climbs

McKesson Corp. added 3.2 percent to $177.95. America’s largest drug distributor said it will acquire Celesio AG just 10 days after a failed tender offer for the European company. McKesson agreed to buy convertible bonds issued by Celesio from hedge fund Elliott Management Corp. It also struck a deal to buy Franz Haniel & Cie.’s majority holding for 23.50 euros a share, giving the San Francisco-based company the ownership of more than 75 percent of Celesio’s shares.

Bristol-Myers Squibb Co. rose 2.4 percent to $55.25. The pharmaceutical company reported quarterly earnings per share of 51 cents, beating the average estimate of 43 cents in a Bloomberg survey.

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