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US STOCKS-Futures lower as Chinese tire tariff sparks worry

Published 09/14/2009, 07:51 AM
Updated 09/14/2009, 07:54 AM
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* U.S. tariff on China tires unnerves investors

* Deutsche Telekom eyes Sprint Nextel bid-report

* Futures off: S&P 8.6 pts, Dow 65 pts, Nasdaq 13.75 pts

NEW YORK, Sept 14 (Reuters) - U.S. stock index futures fell on Monday as a decision by the United States to impose special duties on Chinese tires sparked investor concerns about a possible trade dispute.

* The decision by U.S. President Barack Obama could open the door to a host of trade complaints against Chinese products, creating tensions as Western nations seek the support of the world's third-largest economy at the G20 meetings later this month.

* "China had harsh words about our actions, and this is causing a bit of a rumble, an uneasiness in the markets, this morning," said Andre Bakhos, president of Princeton Financial Group in Princeton, New Jersey.

"The economy is made of glass at the moment, and you need all the trade you can get."

* On the merger-and-acquisition front, Sprint Nextel Corp shares surged 10.6 percent to $4.17 in premarket trading after Britain's Sunday Times newspaper reported that Germany's Deutsche Telekom AG was considering a bid for its U.S. rival.

* British confectioner Cadbury Plc reiterated its stance on a takeover bid from Kraft Foods Inc over the weekend as Cadbury's chairman, Roger Carr, said it was an "unappealing prospect" being absorbed into Kraft's low growth conglomerate business model.

* Investors have also become increasingly wary of stock valuations after a bear market rally extended into its sixth month with the S&P 500 up 54 percent since the March 9 low.

* S&P 500 futures fell 8.60 points and were 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 dropped 65 points, and Nasdaq 100 futures shed 13.75 points.

* Morgan Stanley raised its forecast for U.S. crude oil price to $105 a barrel from $95 for 2012 due to tightening spare capacity. It expects global spare production capacity to stay ample through the end of 2010, before declining in 2011 and by 2012 reaching the similar tightness of 2007-08. Crude futures fell 0.7 percent.

* Obama will attempt on Monday to revive a stalled push for stricter oversight of Wall Street, using the anniversary of Lehman Brothers Holdings Inc's collapse to argue for sweeping regulatory changes.

* European shares fell Monday, breaking a six-session winning streak and pulling back from 11-month highs, with banks and stocks leading the decliners.

* Asian stocks slid and the dollar firmed against major currencies on fears a U.S.-China trade dispute could damage the world economy just as it appears to be getting back on track.

* U.S. stocks broke a five-day winning streak on Friday on a drop in crude oil prices but posted solid gains for the week.

* The Dow Jones industrial average lost 22.07 points, or 0.23 percent, at 9,605.41. The Standard & Poor's 500 Index shed 1.41 points, or 0.14 percent, at 1,042.73. The Nasdaq Composite Index fell 3.12 points, or 0.15 percent, at 2,080.90.

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