U.S. Stock Futures Decline as House Delays Debt Vote

Friday, 29 Jul 2011 06:49 AM

 

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(Corrects currency to U.S. dollars in final paragraph.)

July 29 (Bloomberg) -- U.S. stock-index futures fell after the House of Representatives postponed a vote to increase the nation’s debt limit, boosting concern that lawmakers are far from an agreement to avoid default.

Motorola Mobility Holdings Inc., the handset maker spun off in January from parent Motorola Inc., dropped 2.5 percent as it forecast profit that missed analysts’ estimates. Columbia Sportswear Co. slid 1.7 percent after reporting a loss for the second quarter.

Futures on the Standard & Poor’s 500 Index expiring in September lost 0.3 percent to 1,292.2 at 10:23 a.m. in London. Futures on the Dow Jones Industrial Average slipped 44 points, or 0.4 percent, to 12,149.

“The U.S. is in a mess,” Hugh Young, who helps manage $70 billion in Asian equities at Aberdeen Asset Management Asia Ltd., said in a Bloomberg Television interview. “Anyone holding U.S. or bits of European debt really ought to be thinking closely about what they’re doing.”

Stocks have tumbled by 3.3 percent this week, the largest weekly retreat in almost a year, as concern mounted that lawmakers will fail to agree to increase the U.S. debt ceiling by the Treasury Department’s Aug. 2 deadline. House Speaker John Boehner fell short of the votes within his own party needed to increase the U.S. debt limit after a night of one-on-one appeals to members. President Barack Obama had threatened to veto the House’s plan.

Senate Democrats plan to break the impasse by devising a strict enforcement mechanism to guarantee future deficit savings, according to Democratic officials. The talks center on setting up automatic spending cuts or tax increases, or some combination of the two, if the government fails to stay within the debt limit.

Motorola Mobility Falls

Motorola Mobility declined 2.5 percent to $22.35 in German trading. It forecast profit for the third quarter and full year that missed analysts’ estimates amid growing competition from rival smartphone makers.

Columbia Sportswear slipped 1.7 percent to $60.50 in after hours U.S. trading as it reported a 40-cent-per-share loss for the second quarter.

--Editors: Will Hadfield, Andrew Rummer

To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net; Adam Haigh in London at ahaigh1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

© Copyright 2014 Bloomberg News. All rights reserved.

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