Stocks in U.S. Drop on Housing, Inflation Reports, Japan Nuclear Concern

U.S. stock futures fluctuated after housing starts decreased more than estimated and producer prices topped forecasts, while investors weighed developments in Japan with predictions that American equities may rally.

Futures on the Standard & Poor’s 500 Index expiring in June slipped less than 0.1 percent to 1,275.2 at 8:32 a.m. in New York after climbing as much as 0.6 percent earlier. Dow Jones Industrial Average futures were little changed at 11,789.

The S&P 500 has declined 1.7 percent this week after Japan’s biggest earthquake on record struck the northeast of the country on March 11. Thomas Lee, equity strategist at JPMorgan Chase & Co., and Mary Ann Bartels of Bank of America Corp. were among analysts who said this week that the recent slide in the S&P 500 may be a buying opportunity.

Beginning home construction dropped 22.5 percent to a 479,000 annual rate, Commerce Department figures showed today in Washington. The decline from January was the biggest since March 1984. The median forecast in a Bloomberg News survey called for a 566,000 rate. Building permits, a proxy for future construction, fell 8.2 percent to a 517,000 annual pace.

The producer-price index climbed 1.6 percent from the prior month, the most since June 2009, Labor Department figures showed today in Washington. The median projection in a Bloomberg News survey was for a 0.7 percent gain. The so-called core measure, which excludes volatile food and energy costs increased 0.2 percent, matching forecasts.

Advice to Buy

The S&P 500 has declined 1.7 percent this week after Japan’s biggest earthquake on record struck the northeast of the country on March 11. Thomas Lee, equity strategist at JPMorgan Chase & Co., and Mary Ann Bartels of Bank of America Corp. were among analysts who said this week that the recent slide in the S&P 500 may be a buying opportunity.

Japan’s government suspended its plan to use military helicopters to drop water on the Fukushima facility today, even as officials battled to prevent any of the four stricken reactors at the site from suffering a meltdown. Clouds of white smoke or water vapor rose from the power plant following a fire at Dai-Ichi’s No. 4 reactor this morning. Radiation prevented workers from establishing whether their efforts had extinguished the blaze.

Japan’s earthquake should have a “limited” impact on U.S. growth, according to Goldman Sachs Group Inc. economist Alec Phillips. Disruptions to Japanese output could shift demand to U.S. products, according to Phillips.

To contact the editor responsible for this story: Michael Regan at mregan12@bloomberg.net

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