U.S. stock futures can’t hold rise as oil sprints past $130

By Daniel | May 21, 2008

U.S. stock futures can’t hold gain as oil breaks $130

Fed minutes to come; Time Warner to get $9.25 billion dividend

By Steve Goldstein, MarketWatch

Last Update: 6:42 AM ET May 21, 2008

LONDON (MarketWatch) - U.S. stock futures couldn’t hold tentative gains on
Wednesday as crude-oil futures rallied past the $130 a barrel mark, though Time
Warner rose as it’s set to receive over $9 billion from the separation of its
cable arm.

S&P 500 futures fell 1.9 points to 1,415.50 and Nasdaq 100 futures eased 3.75
points to 2,005.75. Dow industrial futures eased 10 points.

U.S. stocks took a bruising on Tuesday, after a report that core wholesale prices
rose more than forecast in April and another jump in oil prices after T. Boone
Pickens predicted $150 oil. The Dow industrials fell 199 points, the S&P 500
dropped 13 points and the Nasdaq Composite dropped 23 points.

Wednesday’s session features the latest energy inventories report, due out at
10:30 a.m. Eastern, as well as minutes from the last Federal Reserve rate-setting
decision, due out at 2 p.m.

The Bank of England’s minutes separately showed that its members voted 8-to-1 to
hold rates at 5%.

The closely followed Ifo business climate for Germany registered a surprise
improvement during May, helping the euro to advance.

Crude-oil futures rose $1.40 to $130.38 a barrel. Gold futures rose $6.30 an
ounce.

Of stocks in the spotlight, Time Warner (TWX) rose over 5% in pre-open trade as
it’s going to get a dividend of $9.25 billion as it separates from Time Warner
Cable (TWC).

Corporate Express (CXP) offered to buy closely held Lyreco of France for $2.7
billion in a deal that may thwart the takeover ambitions of its suitor Staples
Inc. (SPLS).

Hewlett Packard (HPQ) late Tuesday reported a 16% profit rise as it gave further
comments on its proposed takeover of EDS (EDS).

Also on the tech front, Analog Devices (ADI) reported a 6% profit rise, Micron
Technology (MU) was upgraded to buy from hold at Deutsche Bank, while accounting
software maker Intuit (INTU) topped forecasts on fiscal third-quarter earnings.

Some of Wall Street’s biggest investment banks are facing losses from a new
direction in the second quarter as hedges they used to try and offset the impact
of the subprime crisis have come unglued, The Wall Street Journal reported
Wednesday. Lehman Brothers (LEH) appears to be the worst hit, with write-downs
and losses on ineffective hedges likely to total $1.5 billion to $2 billion, the
report said. Morgan Stanley’s (MS) hedging losses will be less than half of
Lehman’s, it added.

The latest deal that’s coming under pressure for new terms is the $6.1 billion
offer by Fortress Investment Group (FIG) and Centerbridge Partners for Penn
National Gaming (PENN), according to a report in The New York Times.

The Nikkei 225 dropped 1.7% in Tokyo. The FTSE 100 rose 0.2% in London.

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