US STOCKS-Wall Street set to dip at open on growth concerns

Reuters - UK Focus

* AstraZeneca (NYSE: AZN - news) rejects sweetened Pfizer (NYSE: PFE - news) offer

* AT&T (NYSE: T - news) to buy DirecTV (Frankfurt: DIG1.F - news) for $48.5 billion

* Futures off: Dow 42 pts, S&P 4 pts, Nasdaq 6.5 pts (Adds Campbell Soup earnings, updates prices)

By Chuck Mikolajczak

NEW YORK (Frankfurt: HX6.F - news) , May 19 (Reuters) - U.S. stocks were set to dip atthe open on Monday, on the heels of back-to-back weekly declinesfor the S&P 500 as investors grew cautious over stock valuationswith indexes near record levels amid mixed economic data.

* U.S. listed shares of AstraZeneca slumped8.8 percent to $73.20 in premarket trade after the Britishdrugmaker rejected a sweetened and "final" merger offer fromPfizer which would have created the world's largestpharmaceuticals group. Pfizer shares advanced 1.7 percent to$29.60 before the opening bell.

* AT&T lost 2.5 percent to $35.83 in premarket tradeafter the telecom company said it will acquire DirecTV for $48.5 billion, highlighting AT&T's pressing need for freshavenues of growth beyond the maturing U.S. cellular business.DirecTV shares lost one cent at $86.17 in premarket.

* Equities have come under pressure recently, withconsecutive weekly declines for the first time since January asinvestors have become leery of growth prospects as a result ofmixed economic data.

* Small-cap stocks, often seen as the first beneficiary ofgrowth, have tumbled. The small-cap Russell 2000 index has several times approached correction territory, defined as adecline of 10 percent from a recent high, only to bounce backslightly.

* The defensive posture by investors has been reflected by asector rotation into groups such as utilities, telecoms andenergy, which have outperformed the broader S&P 500 over thepast three months.

* S&P 500 e-mini futures lost 4 points and wereslightly below fair value, a formula that evaluates pricing bytaking into account interest rates, dividends and time toexpiration on the contract. Dow Jones industrial average e-minifutures declined 42 points and Nasdaq 100 e-mini futures lost 6.5 points.

* Campbell Soup Co fell 4.8 percent to $42.95 inpremarket after the world's largest soup maker postedweaker-than-expected quarterly sales and cut its full-year salesguidance.

* Earnings season will effectively draw to a close thisweek, with 23 companies scheduled to report, including retailersHome Depot (TLO: HD-U.TI - news) and Lowe's Cos.

* Of the 464 companies in the S&P 500 that have reportedearnings through Friday, 69.2 percent beat expectations, abovethe long-term average of 63 percent and the 66 percent averageover the past four quarters. (Editing by Bernadette Baum)

View Comments (0)