Pre-Market: Contract Termination Costs Starbucks Billions; Tesla Not Even Considering Recall After Fires
Stock futures are falling today as investors await more speeches
by Federal Reserve members for clues about the future of
After falling yesterday, index futures were lower this morning. Dow (INDEXDJX:.DJI) futures were down 0.37% at 15,652.00 while futures on the S&P 500 (INDEXSP:.INX) fell 0.36% to 1,758.70. Nasdaq (INDEXNASDAQ:.IXIC) futures climbed 0.39% to 3,351.50.
No major US economic announcements are scheduled today, but Cleveland Federal Reserve President Sandra Pianalto and Fed Chairman Ben Bernanke will deliver speeches that could draw the market's attention.
Tesla Motors ( TSLA ) CEO Elon Musk said yesterday that the company is absolutely not considering a product recall for the Model S despite three recent reports of battery fires.
"If you read the headlines, it sounds like Teslas have a greater propensity to catch fires than other cars. In reality, nothing could be further from the truth," he said at yesterday's Dealbook conference. "We have never had a serious injury or death in any of our cars. Maybe there is a car as safe as the Model S, but there is certainly not a car that is safer."
Tesla shares were up 2.14% in the wake of the CEO's statement.
Starbucks ( SBUX ) shares fell 1.38% today after the company was forced to pay $2.23 billion in damages and $527 million in interest and attorney fees to Mondelez International ( MDLZ ). An independent arbitrator said that Starbucks improperly terminated its contract with Mondelez, which spun off from Kraft Foods ( KRFT ) a year ago.
Macy's Inc . ( M ) reported better-than expected earnings of $0.47 per share as stronger sales boosted the department store's bottom line. Comparable sales were up 3.5%.
Shares were down across Europe and Asia as well. Eurozone industrial production fell 0.5% in September. From a year earlier, production was down 1.1%. Only the energy sector showed positive growth. Production in France and Germany declined 0.4% and 0.8%, respectively. Italy grew by 0.2%, and Spain grew by 0.4%.
Japanese machine orders fell by more than expected in February. Orders fell 2.1% on a monthly basis, but were up 13% from a year earlier, which is not encouraging as the government is flooring economic stimulus. The consumption tax is slated to rise in April, which might be discouraging capital expenditures.
The Bank of England said that the country might meet 7% unemployment by the third quarter of next year, a bit sooner than previously expected. Once the economy reaches that threshold, the central bank said that it would consider pushing interest rates up. Unemployment in the UK fell to 7.6% in September from 7.7% in August.