* Euro zone factory sector contracts for 8th month
* Avon rises on offer from Coty
* Brent eases near $122 after first-quarter rally
* Futures off: S&P; 0.5 pt, Dow 16 pts, Nasdaq 2.75 pts
By Angela Moon
NEW YORK, April 2 (Reuters) – U.S. stock index futures were
flat on Monday ahead of U.S. manufacturing data after a similar
report on Europe’s manufacturing sector raised concerns about a
recession in the region.
The Institute for Supply Management’s March manufacturing
index, is due at 10 a.m. EDT (1400 GMT). Economists in a Reuters
survey expect an improved reading of 53.0 versus 52.4 in
February. In February, the pace of growth unexpectedly slowed
after three consecutive months of gains, a reminder of the bumpy
economic recovery.
The market also awaited construction spending for February,
due at 10 a.m.
“What we are seeing this morning is nothing but noise coming
off of another positive week last week, and I don’t see a reason
why the solid trend will not continue,” said Andre Bakhos,
director of market analytics at Lek Securities in New York.
“The market has been betting on positive economic numbers
and I expect that to continue.”
Nonetheless, the euro zone’s manufacturing sector shrank for
an eighth straight month in March, according to Markit’s
Eurozone Manufacturing Purchasing Managers’ Index.
In contrast, Chinese manufacturing gained momentum in March,
helped by a recovery in automotive, tobacco and electronics.
S&P; 500 futures slipped 0.5 point and were slightly
below fair value, a formula that evaluates pricing by taking
into account interest rates, dividends and time to expiration on
the contract. Dow Jones industrial average futures lost
16 points, and Nasdaq 100 futures were off 2.75 points.
U.S. stocks closed their strongest quarter in more than two
years on a positive note on Friday, led by underperforming
sectors like energy and health care.
Despite falling six of the last nine sessions, the S&P; 500
gained 12 percent in the first quarter, its best start of the
year since 1998 and the best overall quarter since the third
period of 2009. The broad index sits just off 4-year highs.
The oil sector will be in the spotlight as French oil major
Total SA prepared to fly experts to a North Sea oil
platform ahead of an operation to cap a well spewing gas for the
past week. U.S.-listed Total shares rose 0.6 percent to
$51.43 in premarket trade.
Oil futures dropped about 0.5 percent, with Brent crude
slipping near $122 a barrel, following a 14 percent rise in the
first quarter.
Equity markets will be closed for the Good Friday holiday,
which could create lighter volume and increase volatility. The
government will release the March payrolls report on Friday,
which could leave investors reticent to make big bets ahead of
the data. Trading volume was expected to be light all week.
Beauty company Coty Inc offered to buy cosmetics direct
seller Avon Products Inc for $10 billion, or $23.25 a
share, a 20 percent premium over Friday’s closing price. Avon
jumped 19 percent to $23.05 premarket.
Visa Inc dropped payment processor Global Payments Inc
from its list of approved service providers after a
major cyber intrusion. Visa, MasterCard Inc, American
Express Co and Discover Financial Services all
confirmed they were affected by the breach, which could expose
their cardholders to fraudulent charges.
