(Adds brokerage downgrades on American Express and Wachovia,
report on planned layoffs, updates prices)
By Ellis Mnyandu
NEW YORK, Feb 4 (Reuters) - U.S. stock futures were little
changed on Monday as investors paused to reassess the
sustainability of the run-up that ended with Wall Street's best
week in nearly five years on Friday.
Brokerage downgrades of major financial services companies,
including American Express Co <AXP.N>, could be a drag on the
market.
Even so, Microsoft Corp's <MSFT.O> bid for Yahoo Inc
<YHOO.O> generated optimism among some that equities were
attractively priced relative to value, which helped underpin
the market.
In the face of software maker Microsoft's $44 billion bid,
Yahoo would consider a business alliance with Internet search
company Google Inc <GOOG.O> as one way to rebuff the takeover
proposal, a source familiar with Yahoo's strategy said on
Sunday. For details, see [].
"After having had such a difficult market and seeing it
recovering, it's time to contemplate whether all the problems
have disappeared," said Andre Bakhos, president of Princeton
Financial Group in Princeton, New Jersey.
"Microsoft's bid for Yahoo, though, brings to the forefront
the fact that the market still trades on valuations. There's a
feeling that there's been deeper discounting in the market
place than is warranted by the fundamentals."
S&P 500 futures <SPc1> slipped 3.3 points, about even with
fair value, a mathematical formula that evaluates pricing by
taking into account interest rates, dividends and time to
expiration on the contract.
Dow Jones industrial average futures <DJc1> were off 18
points. Nasdaq 100 <NDc1> futures were down 2.25 points.
Shares of Yahoo were up 0.6 percent at $28.54 before the
bell, while those of Microsoft edged up 0.6 percent to $30.62.
Google shares were little changed from their Nasdaq close
of $515.90 on Friday. Goldman removed the stock from its
America's conviction buy list. []
Shares of credit card and travel services company, American
Express Co, a Dow component, dropped 1.5 percent to $48.88
before the bell after UBS cut the stock, according to
theflyonthewall.com. Wachovia Corp <WB.N> was cut by Merrill
Lynch, theflyonthewall.com said.
Planned layoffs at U.S. companies rose 69 percent in
January from the previous month and were up 19 percent from
January 2007, employment consulting firm Challenger, Gray &
Christmas Inc. reported. []
Also on the economic agenda, a government report on
December factory orders is due at 10 a.m. (1500 GMT).
U.S. stocks rose on Friday, capping Wall Street's best week
in almost five years, after Microsoft's bid for Yahoo
overshadowed news that employers cut payrolls for the first
time since 2003.
(Editing by Kenneth Barry)
