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U.S. Index Futures Are Little Changed; Forest Surges on M&A Deal

Feb. 18 (Bloomberg) -- U.S. stock-index futures were little changed, after the Standard & Poor’s 500 Index capped its largest weekly increase of the year, as investors awaited a report on manufacturing in the New York region.

Forest Laboratories Inc. surged 35 percent in early New York trading after Actavis Plc agreed to buy the maker of the Alzheimer’s drug Namenda. Netflix Inc. advanced after people with knowledge of the situation said the company suspended its plan to secure a place for its video-subscription service on Time Warner Cable Inc. set-top boxes.

Futures on the S&P 500 expiring in March advanced 0.1 percent to 1,837.3 at 7:35 a.m. in New York. Dow Jones Industrial Average contracts rose 29 points, or 0.2 percent, to 16,156. The U.S. market was closed yesterday for the Presidents’ Day holiday.

“U.S. equities should trade very quietly,” Jean-Paul Jeckelmann, who helps manage $1.5 billion in equities as chief investment officer of Banque Bonhote & Cie. in Neuchatel, Switzerland, said in an interview. “There are no real drivers after the sharp rise of the last few days. The trend is still positive but has heavy resistance around the previous high. If we were to break this level in the next few sessions, the market could quickly move to 1,900.”

The S&P 500 closed within 0.5 percent of its all-time high on Feb. 14 amid better-than-forecast earnings and continued confidence in the strength of the world’s biggest economy.

U.S. Economy

A report at 8:30 a.m. local time may show that manufacturing in New York, northern New Jersey and southern Connecticut slowed this month. The Federal Reserve Bank of New York’s general economic index fell to 9 in February from 12.5 in January, the median economist forecast in a Bloomberg News survey shows. Positive readings mean that activity expanded.

While the Fed has started slowing the pace of its bond buying, the Bank of Japan boosted lending programs today. The People’s Bank of China sold repurchase contracts for the first time since June, draining funds from the banking system.

“It seems like as if central banks are driving markets again in the short run,” Jeckelmann said. “On one side the BOJ increased the size of lending facilities, on the other the PBOC drained liquidity from the money markets. The story around central banks is far from over.”

Coke Earnings

A total of 12 S&P 500 companies are due to report earnings today. About 75 percent of those that have posted results have beaten estimates for profit and 64 percent have exceeded sales projections, according to data compiled by Bloomberg. Companies in the gauge are exceeding analyst revenue forecasts by the most since 2012, a sign rising consumer demand is fueling economic expansion.

Forest jumped 35 percent to $96.25. Actavis, the world’s second-largest generic-drug maker by market value is buying Forest for about $25 billion. Forest stockholders will receive cash and stock valued at $89.48 a share, the companies said in a statement.

Netflix, the world’s largest subscription streaming service, added 0.5 percent to $437.51. The discussions about carrying the video-subscription service are unlikely to progress before Time Warner Cable’s $45.2 billion acquisition by Comcast Corp. is completed, people close to the situation said. Comcast, which isn’t as far along in its own talks with Netflix, is focused on increasing film downloads and rentals with its new X1 set-top box platform, they said.

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