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Stocks off highs, following Europe

Stocks are following European shares lower today as markets pull back from record highs.

S&P 500 futures are off almost 0.3 percent, while most of Europe is down about 0.6 percent. Asia was mostly higher overnight, with Hong Kong and Bangkok climbing 0.9 percent. Mumbai and Tokyo continued their recent rallies with gains of 0.7 percent each.

The S&P 500 has closed at new record highs in five of the last six sessions following a breakout above 1,900. Transportation stocks have led the advance as investors anticipate the economy returning to growth later this year.

It's a big week in terms of economic catalysts. Yesterday the Institute for Supply Management's manufacturing index beat estimates. India's central bank introduced mild stimulus this morning and Australian monetary officials left interest rates unchanged as they bemoaned weakness in the country's once-great mining sector.

This morning in Europe, unemployment unexpectedly fell and inflation slowed more than forecast in May. Investors are betting that the region's central bank will cut interest rates on Thursday morning. Factory orders at 10 a.m. ET, a relatively unimportant event, are the only item on the U.S. economic calendar today. Tomorrow is busier, with ADP's private-sector payrolls report due before the opening bell.

Gains have been dispersed across the market, with no single major sector dominating performance. But certain industries such as solar energy, real-estate services, fuel cells, airlines, and mobile semiconductors have emerged as winners in the last two weeks. Metals and related stocks have lagged as deflationary pressures sweep the globe: coal, iron, silver miners, steel makers, copper stocks, and gold miners.

The bidding war for Hillshire Brands intensified as Pilgrim's Pride raised its takeover offer to $55 a share. PPC initially offered $45 and is now responding after Tyson Foods made a $50 bid. HSH is up 8 percent to over $58.10 in pre-market trading , which suggests that investors expect an even higher transaction price.

In other company-specific news, Quicksilver is plunging 37 percent after profit and sales missed estimates by a wide margin. Krispy Kreme dropped 11 percent after cutting full-year guidance. AT&T rose fractionally after raising its outlook, and Dollar General held its ground despite missing consensus.

Copper is down 1.3 percent, while grains and oil are fractionally lower. Precious metals are trying to hold long-term lows. There are no big movers in currency markets.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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