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U.S. Stock Futures Fall as Groupon, J.C. Penney Miss Estimates

Nov. 9 (Bloomberg) -- U.S. stock futures fell, signaling the Standard & Poor’s 500 Index will extend its biggest weekly decline in five months, as companies from Groupon Inc. to J.C. Penney Co. reported results that missed analyst estimates.

Groupon plunged 17 percent in early New York trading after the largest daily-deal website reported revenue that fell short of analyst estimates. J.C. Penney tumbled 9.3 percent after posting a wider-than-estimated loss. Walt Disney Co. lost 3 percent after the company also posted sales that missed projections.

S&P 500 futures expiring in December slipped 0.4 percent to 1,369.2 at 7:34 a.m. New York time, after the benchmark equities gauge dropped 1.2 percent yesterday extending its decline so far this week to 2.6 percent. Dow Jones Industrial Average futures fell 57 points, or 0.5 percent, to 12,718 today.

“The slowdown in the global economy and anemic U.S. recovery have resulted in one of the worst quarterly-earnings seasons since 2009,” said Ioan Smith, a director at Knight Capital Europe Ltd. in London. “Companies missing top-line numbers matters because margin expansion is getting harder.”

Equities slumped for a second day yesterday amid mounting concern that Greece’s bailout will be delayed and the re- election of President Barack Obama endangers tax breaks. The S&P 500 has lost 3.6 percent in the past two days as Obama’s victory and a split congress raised concern lawmakers will be unable to compromise and avoid automatic spending cuts and tax increases at the beginning of next year.

Recession Risk

The Congressional Budget Office yesterday reaffirmed its previous projection that allowing the tax increases and spending cuts to take effect would lead to a recession in the first half of 2013. Congress will focus on the so-called fiscal cliff at its post-election session next week.

Fitch Ratings Managing Director Ed Parker also said yesterday in an interview that the U.S. risks entering a recession should policy makers fail to avoid the deadlock. The ratings company warned on Nov. 7 that the country may be downgraded next year unless lawmakers reach a deal.

“There has been a significant sentiment shift this week post the election with concerns over higher tax rates, regulation and lack of action on reforming entitlements would play into risk aversion theme in the U.S.,” said Smith. “I suspect that we will enter a period of range bound-trading over the near term with Thanksgiving ahead.”

Earnings Scorecard

The S&P 500 is still up 9.5 percent this year as central banks around the world announced measures to boost the economy. About 72 percent of companies that released quarterly results have beaten analysts’ estimates, according to data compiled by Bloomberg. Sixty percent of the companies posted sales that trailed projections.

S&P 500 futures earlier today rose as much as 0.5 percent after Chinese factory output and retail sales data exceeded forecasts and inflation unexpectedly cooled to the slowest pace in 33 months, signaling the government is boosting growth without driving a rebound in prices.

Investors also await U.S. data at 9:55 a.m. New York time that may show consumer confidence improved this month. The Thomson Reuters/University of Michigan consumer-sentiment index probably climbed to 83 in November, according to median economists in a Bloomberg Survey. The October reading of 82.6 was the highest since September 2007.

Groupon Revenue

Groupon tumbled 17 percent to $3.27 in early New York trading after the company reported a 32 percent increase in third-quarter sales to $568.6 million that still missed the average analyst estimate of $591 million, according to a Bloomberg survey.

International revenue was $276.9 million, or 49 percent of total sales. That was down 10 percent from the second quarter of this year.

J.C. Penney sank 9.3 percent to $19.68 after the fourth- largest U.S. department-store company reported a third-quarter net loss of $123 million, or 56 cents a share.

That compares with a loss of $143 million, or 67 cents, a year earlier. Excluding some items, the loss was 93 cents a share. The average of eight analysts’ estimates compiled by Bloomberg was for a 7-cent loss.

Walt Disney fell 3 percent to $48.55 after the world’s largest entertainment company reported a 3.4 percent increase in fourth-quarter sales to $10.8 billion. That missed the average analyst estimate of $10.9 billion, according to a Bloomberg survey. Film revenue and ABC network advertising fell.

Kayak Software Corp. surged 26 percent to $39.08 after Priceline.com Inc. agreed to buy the company for $1.8 billion in cash and stock.

Shareholders of Kayak, which held an initial public offering in July, will receive $40 a share -- a 29 percent premium over yesterday’s closing price of $31.04 in New York. It also includes about $500 million in cash as well as $1.3 billion in equity and assumed stock options.

Priceline, the most valuable online-travel agency, fell 3.1 percent to $608.43 in German trading.

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