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U.S. Stock Futures Hover Near Flatline Ahead of Durable Goods Data

11/27/2012 | 08:26am US/Eastern
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--Stock futures mixed as Greek debt deal offset by 'fiscal-cliff' worries

--Europe markets gain as agreement on lower Greek debt paves way for release of bailout funds

--Durable goods seen slipping 1.2%; data on home prices, consumer confidence also on tap

 
   By Tomi Kilgore 
 

NEW YORK--U.S. stock futures hovered near unchanged levels ahead of durable goods data, with optimism over a Greek debt deal tempered by concerns over the looming U.S. 'fiscal cliff.'

About 90 minutes ahead of the open, Dow Jones Industrial Average futures slipped one point, or less than 0.1%, to 12935.

Standard & Poor's 500-stock index futures inched up one point, or 0.1%, to 1404 and Nasdaq 100 futures edged up six points, or 0.2%, to 2652. Changes in stock futures don't always accurately predict stock moves after the opening bell.

Data on durable goods orders for October are due out at 8:30 a.m. EST. The median estimate of economists surveyed by Dow Jones Newswires is for a monthly decline of 1.2%, after surging 9.8% in September. At 9 a.m., the S&P Case-Shiller 20-City home prices index for September is expected to rise 3%, and the Federal Housing Finance Agency's house price index due out at 10 a.m. is seen increasing 0.4%.

Also at 10 a.m., a reading on consumer confidence for November is expected to show a slight increase from October, and data on manufacturing activity in the Richmond region is due.

The 'fiscal cliff' refers to a series of tax increases and spending cuts scheduled to go into effect at the beginning of 2013 unless a budget deal can be reached. The Organization for Economic Cooperation and Development warned Tuesday that a failure to prevent those fiscal austerity measures would likely tip the U.S. economy into recession, which would have global implications.

And Richard Fisher, president of the Federal Reserve Bank of Dallas, warned that just a temporary fix to the U.S. federal budget deficit that doesn't provide clarity on tax and regulatory policy could have destructive effects on the U.S. economy.

European markets were broadly higher, with the Stoxx Europe 600 tacking on 0.5%, after euro zone finance ministers reached agreement on reducing Greece's debt, which paves the way for the release of the next tranche of bailout funds.

The agreement aims to have Greece's debt reduced, through the extension of loan maturities, lower interest rates and debt buybacks, to 124% of gross domestic product by 2020, from more than 170% currently.

Yields on Spanish, Italian and Greek government bonds all eased slightly after the agreement was reached.

Asian markets closed mostly higher on the back of the Greek debt deal, with Japan's Nikkei Stock Average gaining 0.4% and Australia's S&P ASX 200 advancing 0.7%.

But Chinese stocks bucked the trend as the Shanghai Composite slumped 1.3% to close at the lowest level seen since January 2009 amid concerns over the strength of corporate earnings.

Front month crude oil futures gained 0.2% to $87.91 a barrel, while December gold futures slipped 0.2% to $1,746.70 an ounce. The dollar rose against the euro and edged up against the yen.

In corporate news, shares of Ralcorp ran up 27% in premarket trading after the private-label food producer company finally agreed to be acquired by ConAgra Foods for $5 billion in cash, after rejecting several bids last year. ConAgra shares climbed 2.6%.

Equity Residential and AvalonBay Communities announced an agreement to buy apartment-building owner Archstone Enterprise from Lehman Bros. for $6.5 billion in cash and stock. After the deal closes, Equity Residential will own about 60% of Archstone and AvalonBay will own 40%.

Separately, Equity Residential said it planned to offer about 19 million shares of its common stock for sale to the public, and AvalonBay said it launched a public offering of 14.5 million shares of its common stock. Equity Residential and AvalonBay shares were still inactive in the premarket.

Clean Diesel Technologies soared 62% after the company said its emission reduction system received verification from the Environmental Protection Agency.

Dollar General rose 3.2% after Standard & Poor's said the discount retailer's stock will replace Cooper Industries, which is being acquired by Eaton, in the S&P 500 Index.

Las Vegas Sands tacked on 4.4% after the casino operator said it will pay a special cash dividend of $2.75 a share, on top of its regular annual dividend of $1.40 a share.

Generac Holdings gained 5.3% after the generator maker said it was withdrawing plans for a secondary offering of common shares due to market conditions.

Write to Tomi Kilgore at tomi.kilgore@dowjones.com

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