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US STOCKS-Futures fall on Ireland debt, China rates concern

Published 11/12/2010, 07:34 AM
Updated 11/12/2010, 07:36 AM
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* China tightening fears sends local stocks down 5 pct

* Concerns over Irish debt rumble on

* Futures off: S&P 7.2 pts, Dow 45 pts, Nasdaq 11.5 pts

By Edward Krudy

NEW YORK, Nov 12 (Reuters) - U.S. stocks index futures fell on Friday on expectations China would raise interest rates, hitting commodity prices and sending the local stock market into a tailspin.

* China stocks fell 5.2 percent on Friday for their biggest percentage loss in over a year, while global commodities tumbled on speculation the central bank is about to raise interest rates to tackle inflation.

* "The macro today is the thing that is going to rule," said Kim Caughey, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh. "China in the past year, whenever they've raised interest rates, it has hit the market."

* Resource-related stocks were likely to take the brunt of selling as crude oil dropped almost $2 a barrel to near $86, while copper fell around 2 percent. In early trading, Exxon Mobil Corp fell 1 percent, while Freeport-McMoRan Copper & Gold Inc was off 2.3 percent.

* S&P 500 futures declined 7.2 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 45 points, and Nasdaq 100 futures dropped 11.5 points.

* EU leaders reassured investors they would not be forced to write down the value of their bond holdings in the event of a new euro zone bailout, but that appeared to do little to ease the pressure on broader markets.

* European stocks dropped on Friday, losing ground for the third straight session, hurt by escalating fears over Ireland's debt problems that also dragged the euro to six-week lows versus the dollar. The FTSEurofirst 300 index of top European shares was down 0.5 percent.

* Graphics chipmaker Nvidia forecast higher sales for the current quarter late Thursday and said its mobile business would take off next year when tablets and smartphones will use its Tegra chips. The shares rose 5 percent to $13.24.

* D.R. Horton Inc, the biggest U.S. homebuilder, reported a narrower quarterly loss, citing soft demand after the expiration of the federal government's homebuyer tax credit.

* Other companies due to report on Friday include Agilent Technologies Inc and JC Penney Co Inc.

* Yahoo Inc described a report on technology blog TechCrunch that it was planning to cut one-fifth of its workforce as "misleading and inaccurate" but stopped short of ruling out any layoffs.

* The chief executive of Wal-Mart Stores Inc's Asia operations declined to comment on whether it was bidding for Indonesian retailer Matahari's hypermarket business. Sources told Reuters Wal-Mart hired Barclays to advise on a deal.

* The Thomson Reuters/University of Michigan Surveys of Consumers is due to be released at 9:55 a.m. (1455 GMT) preliminary November consumer sentiment index. Economists in a Reuters survey expected a reading of 69.0 compared with 67.7 in the early November report.

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