Feb 8, 2012

S&P 500 Futures – U.S. stocks were little changed, a day after the Dow Jones Industrial Average reached the highest level since 2008, as Greek Prime Minister Lucas Papademos began talks with political leaders on terms required for a bailout.

Equities reversed gains after a report that the European Central Bank was still divided on its role in a Greek debt restructuring. Six out of 10 groups in the S&P 500 retreated as energy and utility shares had the biggest declines. Sprint (S) Nextel Corp., the third-largest U.S. wireless carrier, slumped 2 percent after reporting a wider loss. Hartford (HIG) Financial Services Group Inc. climbed 9.2 percent after billionaire John Paulson demanded action to boost the stock performance.

The Standard & Poor’s 500 Index fell less than 0.1 percent to 1,346.88 at 1:01 p.m. New York time, after rising as much as 0.3 percent earlier today. The Dow lost 15.48 points, or 0.1 percent, to 12,862.72.

“It seems as if everyone is holding their breath and waiting for some kind of resolution in Greece to let us know what direction to take next,” Michelle Gibley, senior market analyst at San Francisco-based Charles Schwab Corp., said in a telephone interview. Her firm has $1.68 trillion in client assets. “A deal will be made ultimately, but policy makers have already proven that deadlines mean little to them.”

Papademos began negotiating with leaders of the political parties supporting his caretaker government as he tried to make up for lost time to secure a second aid package. ECB policy makers are still divided on what contribution the central bank could make, Reuters reported, citing two unidentified euro-zone monetary-policy sources.

S&P 500: Earnings Season

The S&P 500 yesterday closed about 1.2 percent away from its peak nine months ago, which was the highest level since June 2008. The index rose 7.1 percent this year through yesterday amid better-than-expected economic data and corporate profits. Earnings (SPX) beat projections at 68 percent of the 301 companies in the S&P 500 that reported quarterly results since Jan. 9, according to data compiled by Bloomberg.

“Be 100 percent in equities,” Laurence D. Fink, chief executive officer of BlackRock Inc., the world’s largest money manager, said in a Bloomberg Television interview from Hong Kong today. “I don’t have a view that the world is going to fall apart, so you need to take on more risk. You need to overcome all this noise and there are great values in equities.”

The S&P 500 trades for about 14 times its companies’ earnings and has been stuck below its five-decade average multiple of 16.4 since May 2010, the longest stretch since a 13- year period beginning in 1973.

S&P 500: Energy Shares

A measure of energy shares had the biggest decline among 10 industries in the S&P 500, falling 0.8 percent. Exxon Mobil Corp. (XOM) lost 1.1 percent to $84.93. Financial shares had the biggest gain, rising 0.2 percent as a group. Bank of America Corp. (BAC) jumped 1.9 percent to $8.

Sprint slumped 2 percent to $2.40. The net loss expanded to $1.3 billion, or 43 cents a share in the fourth quarter, from $929 million, or 31 cents, a year earlier, the carrier said today in a statement. The company said it had one-time costs of 8 cents a share from revaluing assets. Analysts predicted a loss of 38 cents, the average of estimates compiled by Bloomberg.

Moody’s Corp. (MCO) lost 2.5 percent to $37.99. The owner of the world’s second-largest provider of credit ratings said fourth- quarter profit fell 30 percent as Europe’s sovereign-debt crisis slowed bond sales around the world, reducing demand for its services.

Money Transfer

Western Union Co. (WU) slumped 8 percent, the biggest decline in the S&P 500, to $18.12. The world’s largest money-transfer business forecast earnings in 2012 will be no more than $1.75 a share, less than the average analyst estimate of $1.81.

Hartford jumped 9.2 percent to $20.88. Paulson, the billionaire hedge fund manager who controls the largest stake in Hartford, told Chief Executive Officer Liam McGee he needs to reverse the insurer’s stock slide. The insurer declined 39 percent last year and trades at less than half of the company’s book value, which is a measure of assets minus liabilities.

“Hartford needs to do something drastic because the stock is the lowest valuation relative to book value of any major insurance company,” Paulson said today at a conference call for analysts and investors held by Hartford. The company hired advisers to evaluate splitting the life insurance and property- casualty businesses, Hartford said today.

Ralph Lauren Corp. rallied 9.4 percent to $171.85. The retailer of its namesake brand clothing said revenue in the current fiscal year may gain more than it previously expected.

Computer Sciences Corp. (CSC) surged 17 percent, the most in the S&P 500, to $31. The technology contractor for governments and companies named Mike Lawrie as its next chief executive officer as it renegotiates a contract with the U.K.’s National Health Service.

- Rita Nazareth in New York at Bloomberg.