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U.S. Stock-Index Futures Climb Amid Ukraine, Russia Truce Talks

Aug. 18 (Bloomberg) -- U.S. stock futures advanced, after the Standard & Poor’s 500 Index posted its biggest weekly gain since July, as diplomats from Ukraine and Russia discussed a possible truce and Kurdish forces made progress against militants in Iraq.

Dollar General Corp. surged 9.1 percent after offering $9.7 billion for Family Dollar Stores Inc. Family Dollar rallied 4.7 percent. Monster Beverage Corp. declined 1.6 percent, indicating it may fall from its highest price in at least 24 years, after Jefferies Group LLC downgraded the shares.

S&P 500 futures expiring next month climbed 0.5 percent to 1,962.8 at 8:22 a.m. in New York. Dow Jones Industrial Average contracts added 87 points, or 0.5 percent, to 16,718 today.

“We’ve seen very good earnings, and geopolitical tensions are not as elevated at the moment,” Patrick Spencer, head of U.S. equity sales at Robert W. Baird & Co., said by phone. “There’s been a lot of talk about a correction for equities, but markets are already a couple of points off their highs.”

Ukrainian Foreign Minister Pavlo Klimkin met his Russian counterpart Sergei Lavrov for more than five hours of talks in Berlin, as they sought to ease tension after officials in Kiev said troops had partially destroyed an armed convoy from Russia. Klimkin said the talks had brought “moderate progress,” though he called on Russia to follow words with actions.

Iraqi and Kurdish forces retook control of the Mosul Dam, Iraqiya television reported, citing military spokesman Qassem Ata. The U.S. widened its airstrikes in Iraq at the weekend to help secure the dam near Mosul, Iraq’s largest northern city, after it was seized by Islamist militants. Iraq is OPEC’s second-biggest oil producer.

Global Conflicts

The S&P 500 fell as much as 3.9 percent from a record reached on July 24 amid growing concern over global conflicts from Ukraine to Gaza and Iraq. The benchmark index gained 1.2 percent last week as data showing an uneven economic recovery boosted speculation that the Federal Reserve won’t raise rates sooner than anticipated.

Reports last week showed the euro area’s recovery stalled in the second quarter, spurring speculation the European Central Bank will boost stimulus measures. In the U.S., July retail sales registered the worst performance in six months, jobless claims rose more than forecast and consumer sentiment slipped.

The Fed is watching economic data to help gauge adjustments to monetary stimulus. The central bank remains on pace to wind down its monthly bond purchases in October. Fed Chair Janet Yellen has said officials will keep its benchmark interest rate low for a “considerable time” after the bond buying ends. The central bank releases minutes from its July meeting on Aug. 20.

Urban Outfitters

Clothing retailer Urban Outfitters Inc. is reporting earnings today. Of the S&P 500 companies that have reported quarterly results this season, 76 percent have topped earnings estimates, while 65 percent exceeded sales projections, according to data compiled by Bloomberg.

Dollar General jumped 9.1 percent to $62.70 as it proposed to pay $78.50 a share in cash for Family Dollar, challenging Dollar Tree Inc.’s takeover bid of $74.50 a share in cash and stock. Dollar General forecast synergies of as much as $600 million on an annual basis, three years after completion of the deal.

Family Dollar shares added 4.7 percent to $79.62, while Dollar Tree fell 1.4 percent to $54.80.

Time Warner Inc. climbed 1.6 percent to $77.74. The stock has fallen 7.9 percent this month following 21st Century Fox Inc.’s decision to withdraw its $75 billion takeover offer.

Monster Beverage lost 1.6 percent to $92.03 after Jefferies downgraded the stock to hold from buy, saying it is fully valued. Monster Beverage surged 30 percent on Aug. 15 after Coca Cola Co. agreed to buy a stake, pushing its valuation to 36.1 times estimated earnings. That compares with a five-year average multiple of 24.7.

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