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U.S. Stock-Index Futures Retreat Before Confidence Data

July 26 (Bloomberg) -- U.S. stock-index futures fell, with the Standard & Poor’s 500 Index heading for its first weekly decline in more than a month, as investors weighed corporate earnings before a report on consumer confidence.

Zynga Inc. plunged 17 percent after abandoning plans to enter online gambling and forecasting earnings that fell short of estimates. Expedia Inc. tumbled 23 percent after missing second-quarter sales and profit estimates. Starbucks Corp. jumped 7 percent after reporting profit that beat estimates.

Futures on the S&P 500 expiring in September slipped 0.5 percent to 1,675.7 at 9:13 a.m. in New York. The benchmark index is down 0.1 percent for the week, the first retreat since June 21. Contracts on the Dow Jones Industrial Average fell 80 points, or 0.5 percent, to 15,404 today.

“People are digesting what’s going on with earnings,” Kully Samra, who manages U.K. clients for Charles Schwab Corp., which has $2.1 trillion of assets globally, said by telephone. “Earnings have been mixed, although we don’t think that puts the longer-term story of the U.S. being in a good place at risk. It’s going to be a bumpy road.”

A report at 9:55 a.m. New York time may show consumer confidence slipped this month. The Thomson Reuters/University of Michigan index of consumer sentiment dropped to 84 from 84.1 in June, according to the median estimate of economists surveyed by Bloomberg. The initial reading for the measure was 83.9.

Japan Prices

Consumer prices in Japan excluding food rose 0.4 percent in June, more than economists estimated and the biggest jump since 2008, damping speculation the country will need to expand stimulus. China directed more than 1,400 companies in industries from steelmaking to papermaking to cut excess capacity by year-end.

The S&P 500 is heading for a 5.2 percent advance this month, its biggest since October 2011. The gauge fell in June, after seven successive months of gains, as investors examine economic data for clues on when the Federal Reserve will start to reduce its $85 billion of monthly bond purchases.

Support from central banks and better-than-estimated earnings have driven the S&P 500 up as much as 151 percent from its March 2009 low to record highs. The Fed has said economic data will determine the timing and pace of any reduction in its bond-buying.

The Fed will start trimming its purchases in September, according to a Bloomberg survey of economists. Fed Chairman Ben S. Bernanke said last week it is “way too early to make any judgment” as to whether policy makers will start tapering purchases in September. The Fed’s Open Market Committee next meets to review policy on July 30-31.

Earnings Season

Investors are also watching company earnings reports. Of the 260 companies in the S&P 500 that have posted quarterly results so far, 73 percent have exceeded analysts’ estimates for profit and 57 percent have topped sales projections, data compiled by Bloomberg show.

Zynga plunged 17 percent to $2.92 after abandoning plans to enter the online-gambling business in the U.S. The maker of the social-networking game “FarmVille” also forecast third-quarter sales and earnings that fell short of analysts’ estimates as fewer users access its titles on Facebook Inc.’s website.

Expedia sank 23 percent to $49.95. The online travel agency posted second-quarter earnings, excluding some items, of 64 cents a share, falling short of the 81 cents analysts predicted on average.

Online Travel

The results raised concerns that the online travel industry, where it competes with Orbitz Worldwide Inc., Priceline.com Inc. and TripAdvisor Inc., is headed for a slump. Economic swings in Europe, as well as increased competition, has weighed on the performance of Web-booking services.

Amazon.com Inc. dropped 1.4 percent to $299.25. The world’s largest online retailer reported a surprise loss as the Seattle-based company continued to pump money into warehouses and digital content, fueling sales growth at the expense of profits.

Newmont Mining Corp. fell 2.3 percent to $29.25. The second-largest gold producer reported a surprise loss after taking a $2.26 billion writedown on the value of stockpiles and two Australian mines following a slump in bullion prices.

Vertex Pharmaceuticals Inc. slumped 8.7 percent to $80. The company said U.S. regulators placed a partial clinical hold on its trial of a drug for hepatitis C after patients receiving a high dose of the medicine showed signs of potential liver toxicity.

Food Menu

Starbucks rose 7 percent to $72.94. Chief Executive Officer Howard Schultz’s push into food is starting to pay off, driving traffic into U.S. stores and lifting sales and profit. The world’s largest coffee-shop operator posted third-quarter earnings of 55 cents a share, higher than the 53 cent profit forecast by analysts, and raised its projection for fiscal 2013 profit.

Activision Blizzard Inc. surged 14 percent to $17.24. The company and a management group led by Chief Executive Officer Bobby Kotick agreed to buy out parent Vivendi SA’s controlling stake in the biggest U.S. video-game publisher for $8.17 billion.

Cliffs Natural Resources Inc., the worst-performing stock in the S&P 500 so far this year, jumped 4.8 percent to $19.26. The largest iron-ore producer in the U.S. posted second-quarter earnings of 82 cents a share, surpassing the average analyst estimate of 59 cents. Revenue in the period also topped forecasts and Cliffs increased its capital-expenditure outlay for 2013 to $1 billion from no more than $850 million.

Tesla Motors Inc. gained 4 percent to $129.03 after Deutsche Bank analyst Dan Galves boosted his rating on the stock to buy from hold. He said shares of the electric-car maker could more than double in the next three to four years, citing a rise in U.S. orders and lowered concern over quality issues after a Consumer Reports review.

To contact the reporters on this story: Inyoung Hwang in London at ihwang7@bloomberg.net; Lu Wang in New York at lwang8@bloomberg.net

To contact the editors responsible for this story: Andrew Rummer at arummer@bloomberg.net; Lynn Thomasson at lthomasson@bloomberg.net

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