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US stock futures decline despite hopes of rebound

US stock futures declined signaling the benchmark indexes would expand their monthly loss in more than a year.

Futures on the S&P 500 expiring in September plunged by 0.9% to 1,569.9 at 7:14 a.m. in London. The benchmark index sank 2.1 percent last week, the most since April, after the Federal Reserve said it may start reducing stimulus as soon as September this year if the economy improves in line with forecasts. Future contracts on the Dow Jones Industrial Average lost 116 points, or 0.8 percent, to 14,595 today.

“The last two business cycles have really been caused by major asset swings where asset prices got too high, the bubble burst and then we went into recession,” Larry Kantor, the New York-based head of research at Barclays Plc, told Anna Edwards on Bloomberg Television.

The statements made by Feds chairman Ben Bernanke for the bond buying program have triggered mixed signals among investors. Many of them expect markets to rebound from the temporary drop and think the decline was caused mostly by overreaction than anything else.

However, strongly positive economic data have not been issued lately despite forecasts of higher growth rate. As of right now economy is slowly moving expecting more economic data of consumer confidence, GDP and housing.

In corporate news, Deere lost 1.8% as JPMorgan cut its rating on the world’s largest agricultural-equipment maker to “underweight”, similar to a “sell” recommendation.

Allergan retreated 1.1% in early New York trading. Deutsche Bank AG downgraded the maker of the Botox wrinkle treatment to “hold” from buy and Leerink Swann LLC trimmed its recommendation to “perform” from “outperform”.

Vanguard Health Systems soared 66% to $20.49 in pre-market New York trading. Tenet Healthcare Corp. will pay $21 a share in cash for the Nashville, which is 70% above the Fridays share price of Vanguard. The purchase will contribute 28 hospitals to Tenet. Bank of America is financing the deal and Lazard Ltd. acted as financial and strategic adviser.

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