December 27th, 2012

S&P 500 Futures – U.S. stocks fell, after a three-day drop for the Standard & Poor’s 500 Index, as consumer confidence declined more than forecast and lawmakers returned to Washington to resume budget talks.

Marvell Technology Group Ltd. fell 3.6 percent after being downgraded by JMP Securities LLC. BCD Semiconductor Manufacturing Ltd. (BCDS) almost doubled after Diodes Inc. agreed to buy the company for $151 million.

The S&P 500 fell 0.2 percent to 1,417.62 at 10:09 a.m. in New York. The Dow Jones Industrial Average lost 13.69 points, or 0.1 percent, to 13,100.90 today. Trading in S&P 500 companies was 36 percent below the 30-day average at this time of day.

“Markets may have been disappointed by the lack of decisive action on the fiscal cliff, but at least President Barack Obama’s flight back to Washington is a positive sign,” said Pierre Mouton, who helps oversee $6 billion as portfolio manager at Notz Stucki & Cie. in Geneva. “Most investors will wait until early January to decide whether to take on risk or not.”

The S&P 500 has slipped 0.9 percent this week as talks between President Barack Obama and Congressional lawmakers dragged on beyond the Christmas holiday. The gauge has still rallied 13 percent this year, its largest annual gain since 2009.

Obama is pushing U.S. lawmakers to agree on an interim deal to avert more than $600 billion of automatic tax increases and spending cuts, known as the fiscal cliff, that will otherwise come into effect next month. Republican House leaders will hold a conference with party members today to discuss the next steps in budget negotiations, according to an aide who asked for anonymity to discuss the issue.

‘Extraordinary Measures’

Treasury Secretary Timothy Geithner wrote in a letter to Congress yesterday that the federal debt limit will be reached on Dec. 31 and his department will begin using “extraordinary measures” to finance $200 billion in deficits in early 2013.

Equities fell after data showed confidence among U.S. consumers declined more than forecast in December as the budget debate in Washington soured Americans’ outlook for the economy. The Conference Board’s index of sentiment fell to 65.1 from a revised 71.5 reading the prior month, figures from the New York- based private research group showed today. The gauge was projected to fall to 70, according to the Bloomberg survey median.

Sales of new houses rose in November to the highest level in more than two year, another report showed. Fewer Americans than forecast filed claims for unemployment insurance last week as state offices rushed to tally the data in a holiday-shortened period.

Marvell Slumps

Marvell Technology fell 3.6 percent to $7.14 after the stock was cut to market perform from market outperform by JMP, which cited numerous headwinds. The maker of chips for computers and mobile phones tumbled 10 percent yesterday as a U.S. jury ordered it to pay $1.17 billion, a penalty that may be tripled, for infringing patents on integrated-circuit technology held by Carnegie Mellon University.

BCD’s American Depositary Shares surged 95 percent to $7.75 after Diodes said yesterday it will buy the company in an all- cash transaction valued at $151 million. Each of BCD’s ADS, representing six ordinary shares, will be converted to the right to receive $8, according to a statement from Diodes.

Smith & Wesson Holding Corp. advanced 3.9 percent to $8.27 as the gunmaker expanded its stock repurchase program by $15 million. The shares have lost 14 percent since the day before a gunman killed 20 students in a Connecticut elementary school on Dec. 14. The stock closed at $11.02 at the end of September.

- Namitha Jagadeesh in London and Inyoung Hwang in New York at Bloomberg.