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Stock Futures Fall as Chinese Exports Slow

NEW YORK ( TheStreet) -- U.S. stock futures pointed to a lower open Monday after China showed signs of economic slowing.

Futures for the Dow Jones Industrial Average were down 27 points, or 10 points below fair value, at 12,836. Futures for the S&P 500 were down 4 points, or 2 points below fair value, at 1363. Futures for the Nasdaq were down 7 points, or 5 points below fair value, at 2637.

China reported slower-than-expected export growth in the last month. The country saw its largest trade deficit since 1989 in February as exports to debt troubled Europe weakened. The data, together with recent reports on Chinese factory output and retail sales, suggested slowing growth in the country. On the upside, Japan reported that its machinery orders rebounded in January, suggesting future growth momentum.

Japan's Nikkei Average closed down 0.4% on Monday and Hong Kong's Hang Seng finished up 0.23%.

"Be prepared for a slight pullback and definitely more volatility," said Mark Martiak, senior wealth strategist with Premier Financial Advisors. "The steep decline last week prepared us for it," he added, referring to last Tuesday selloff in reaction to China's announcement that it will target a lower 7.5% GDP growth for 2012.

With no U.S. economic data scheduled for Monday, investors continue to focus on Greece's progress in getting a second bailout. Last week, the country successfully completed its debt swap with private investors, a deal which was subsequently declared as a "credit event" triggering payouts related to credit default swaps. Euro leaders Monday are expected to meet in Brussels in order to sign off on $170 billion worth of aid for Greece.

Stocks finished on a positive note Friday despite the ruling from the International Swaps and Derivatives Association on Greece. Positive jobs data at the end of last week showed a third consecutive month of plus 200,000 job additions in February. For the week, the Dow fell 0.4% while the S&P 500 and Nasdaq edged marginally higher.

Germany's DAX was down 0.2%, while London's FTSE was down 0.2% on Monday.

In corporate news, Chinese online video giant (YOKU) announced that it is buying peer Tudou (TUDO) in an all-stock deal valued at more than $1 billion. The combined entity will be called Youku Tudou and become a leading online video company in the world's largest internet market. Tudou reported a net loss of 511.2 million yuan ($81.2 million) last year, while Youku on Monday posted a net loss of 172.1 million yuan. Youku shares were plunging 10% to $22.50 while Tudou shares were surging 118.8% to $34.

FuelCell Energy (FCEL) reported a first-quarter loss of 5 cents a share compared with the loss of 6 cents a share expected by analysts. Shares were gaining 9.3% to $1.64.

Carnival Corporation (CCL) shares were rising 2.3% to $31.28 after being upgraded to outperform from underperform by Exane BNP Paribas. Shares were hurt by its cruise ship accidents.

PepsiCo (PEP - Get Report) on Monday named former senior Wal-Mart (WMT - Get Report) executive Brian Cornell to head Pepsi's largest and most profitable unit, the Americas-wide food division. PepsiCo has also named longtime company executive John Compton to the new position of president. It's viewed that the appointments position both men, and European operations chief Zein Abdalla, as the top internal candidates to succeed CEO Indra Nooyi, who has been getting heat from investors. Shares were adding 1% to $63.80.

Japan's Asahi Kasei agreed to buy Zoll Medical (ZOLL), the medical equipment maker, for $2.21 billion.

Asahi Kasei, which makes chemicals and construction materials, agreed to buy Zoll for $93 a share in a tender offer. The transaction price is a premium of 29.6% over Zoll's average closing stock price over the last 30 trading days.

Later this week, the Federal Reserve will make an announcement on monetary policy, which though not expected to change will nevertheless be subject to intense scrutiny by investors watching for clues of some kind of bond buying later this year. The week is packed full of economic data, including a regional manufacturing report on Thursday and a consumer sentiment reading on Friday.

Also up this week are results of the latest bank stress tests. "The market needs clearer direction which may come with more economic data... [but] if we see something with the financial sector, that could spook markets and we could see a pullback," said Martiak.

April oil futures were down $1.44 cents to $105.96. In other commodities, April gold futures were down $15.40 to $1696.10 an ounce.

The dollar index was 0.17% lower. The benchmark 10-year Treasury was up 3/32 diluting the yield to 2.023%.

-- Written by Chao Deng in New York.

>To contact the writer of this article, click here: Chao Deng.

>To follow the writer on Twitter, go to: @chao_deng

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