June 25 (Bloomberg) -- U.S. stock futures fell, after equities slipped for a second day yesterday, as data showed the U.S. economy contracted more than forecast in the first quarter and crises in the Middle East and Ukraine deepened.
General Mills Inc. sank 2 percent after reporting lower- than-estimated earnings. Monsanto Co. climbed 6.9 percent after boosting its full-year earnings forecast and starting a $10 billion stock buyback. HanesBrands Inc. jumped 4.2 percent after saying it will acquire DBApparel.
Futures on the Standard & Poor’s 500 Index expiring in September dropped 0.2 percent to 1,938.50 at 8:36 a.m. in New York. Dow Jones Industrial Average contracts slipped 45 points, or 0.3 percent, to 16,707 today.
The S&P 500 reached a record last week and is up 7.4 percent since a low on April 11 as data showed the economy is recovering from extreme weather and the first drop in first- quarter GDP since 2011.
The U.S. economy contracted in the first quarter by the most since the depths of the last recession as consumer spending cooled.
Gross domestic product fell at a 2.9 percent annualized rate, more than forecast and the worst reading since the same three months in 2009, after a previously reported 1 percent drop, the Commerce Department said today in Washington. It marked the biggest downward revision from the agency’s second GDP estimate since records began in 1976, owed primarily to a slowdown in health care spending.
Orders for U.S. business equipment climbed in May, showing corporate investment is helping revive the economy after a slump at the start of the year.
Bookings for non-military capital goods excluding aircraft rose 0.7 percent after a 1.1 percent drop in April, data from the Commerce Department showed today in Washington. Demand for all durable goods -- items meant to last at least three years -- decreased 1 percent, reflecting declines in the volatile transportation and defense categories.
Fed Chair Janet Yellen last week said accommodative monetary policy, rising property and equity prices and the improving global economy should lead to above-trend growth. Federal Reserve Bank of Philadelphia President Charles Plosser said yesterday he’s “fairly optimistic” economic growth will exceed 2.4 percent for the remainder of this year and next amid steady growth in jobs.
Fed policy makers on June 18 trimmed bond buying by $10 billion for the fifth straight meeting, to $35 billion per month, while reiterating that they plan to keep the main rate close to zero. The stimulus has helped propel the S&P 500 higher by as much as 191 percent from a bear-market low in 2009. for a “considerable time” after ending the purchases.
Investors also watching developments overseas.
Sunni militants are tightening their grip on a swath of Iraq and now threaten the integrity of the state, according to U.S. military and intelligence officials. The main insurgent group, an al-Qaeda offshoot known as the Islamic State in Iraq and the Levant, or ISIL, is gaining strength through a Sunni uprising against the Shiite-led government, said an intelligence official who briefed reporters by phone yesterday.
Ukrainian President Petro Poroshenko called for immediate talks with Russia, Germany and France after pro-Russian rebels shot down a government helicopter. German Chancellor Angela Merkel said the threat of economic sanctions on Russia will be on the table at a European Union summit amid slow progress in curbing separatist violence in Ukraine.
General Mills retreated 2 percent to $52.65. The company said it is reviewing its North American manufacturing and distribution network, with the goal of streamlining operations and identifying possible capacity reductions.
ImmunoGen Inc. fell 2.1 percent to $12.85. Morgan Stanley rated shares of the biotechnology company underweight, similar to a sell recommendation, with a price estimate of $10.
Coach Inc. declined 1.4 percent to $33.60. Bank of America Corp. cut its rating on the leather-goods manufacturer to underperform, similar to sell, from neutral. Monsanto climbed 6.9 percent to $129. The largest seed company plans a new round of stock buybacks to boost investor returns after ending preliminary talks about a potential takeover of Syngenta AG that would have cut its tax bill.
Monsanto also raised its fiscal full-year forecast for ongoing earnings to $5.10 to $5.20 a share from $5 to $5.20 previous. Fiscal third-quarter net income was $1.62 a share, beating the $1.55 average of analysts’ estimates compiled by Bloomberg.
HanesBrands rose 4.2 percent to $92.25. The clothing manufacturer said it will buy DBApparel in a deal valued at 400 million euros ($544 million).
IMS Health Holdings Inc. added 5.3 percent to $24.45. The company, which sells data on prescription use to drugmakers and analysts, said it will buy information solutions and customer- relationship management businesses from French firm Cegedim SA for about 385 million euros.
Foot Locker Inc. climbed 2.2 percent to $50.57 after Buckingham Research Group rated the shoe retailer a buy, with a price estimate of $58.