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U.S. Stock-Index Futures Drop After S&P 500 Ends Six-Day Rally

June 24 (Bloomberg) -- U.S. stock-index futures slipped, indicating equities will fall after halting a six-day winning streak, as investors watched developments in Iraq and awaited reports on housing and consumer confidence.

Bed Bath & Beyond Inc. lost 0.9 percent in pre-market New York trading as Morgan Stanley recommended selling the stock. Dean Foods Co. dropped late yesterday after a report that Federal authorities requested information in connection with an insider-trading investigation of billionaire investor Carl Icahn. Sonic Corp. climbed 2 percent after quarterly profit and sales exceeded analysts’ projections.

Futures on the Standard & Poor’s 500 Index expiring in September slid 0.2 percent to 1,949.2 at 7:23 a.m. in New York. The equity benchmark gauge slipped less than 0.1 percent yesterday, snapping the six-day gain that pushed it to a record last week. Dow Jones Industrial Average contracts fell 20 points, or 0.1 percent, to 16,820 today.

“With the market close to all-time highs, it’s getting harder and harder to move higher, and investors will want to lock in some profits now,” said Heinz-Gerd Sonnenschein, a strategist at Deutsche Postbank AG in Bonn, Germany. “It makes sense to take a breather with high valuations, tension in Iraq, and people still waiting to see whether economic growth and U.S. companies have recovered from a weak first quarter. There may be a bit more nervousness, but markets have been quite stable and volatility remains very low.”

Low Volatility

The Chicago Board Options Exchange Volatility Index, or VIX, a measure of S&P 500 options prices, closed at 10.98 yesterday, near its lowest level since 2007. The S&P 500 trades at 16.6 times the projected earnings of its members, close to its highest valuation in four years.

Data at 10 a.m. in New York may show confidence among U.S. consumers climbed in June to near its highest level since 2008. The Conference Board index probably climbed to 83.5 from 83 in May, according to the median estimate in a Bloomberg News survey of economists. Commerce Department data at the same time will probably show that new-home sales rose in May, projections show.

Another release at 9 a.m. in New York may show home prices in 20 American cities, measured by the S&P/Case-Shiller index, rose at a slower pace in the year through April.

Federal Reserve Bank of Philadelphia President Charles Plosser, a member of the Federal Open Market Committee, speaks on the economic outlook and monetary policy today. New York Fed President William Dudley will also speak.

Iraq Crisis

Investors are also watching developments in Iraq, where U.S. Secretary of State John Kerry is seeking to prod the country’s leaders to unite against an al-Qaeda offshoot that has seized control over areas of the country, OPEC’s second-biggest oil producer. In Ukraine, pro-Russian forces called a cease-fire in fighting against government troops.

Bed Bath & Beyond fell 0.9 percent to $69.46. Morgan Stanley initiated its coverage of the stock with an underweight rating, similar to a sell recommendation. The shares have lost 24 percent this year.

Dean Foods slipped 0.9 percent to $17.39. The food-and- beverage producer received a subpoena from criminal authorities in recent weeks, the Wall Street Journal reported, citing unidentified people with knowledge of the matter. The investigation concerns Icahn, golfer Phil Mickelson and sports bettor William Walters, it said.

Micron Technology Inc. slipped 0.4 percent to $31.15 in early U.S. trading. The largest U.S. maker of memory chips said third-quarter profit rose to $806 million, while sales climbed to $3.98 billion. Both measures exceeded analysts’ projections, with limited supply in the industry bolstering prices. The stock has rallied 44 percent this year.

Sonic rose 2 percent to $23.10 after the close of regular trading yesterday. The owner of drive-in restaurants said adjusted profit climbed to 30 cents a share in the third quarter, more than the 29 cents that analysts projected. Sales of $152.2 million also beat estimates.

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