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Stock Futures Mixed; Apple Shares Fall

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NEW YORK ( TheStreet) -- Stock futures were trading mixed Monday as investors continued to keep an eye on the U.S. budget negotiations and awaited New York state manufacturing data.

The Nasdaq was weighed down by a slide in Apple (AAPL) shares following a downgrade by Citigroup Sunday night.

Apple shares were tumbling by more than 2% to $498 in premarket trading after it was downgraded to neutral from buy and the price target cut to $575 from $675 by Citigroup analyst Glen Yeung, as near-term supply chain order reductions raised questions about the strength of the iPhone5.

Apple said sales of the iPhone 5 in China has exceeded more than 2 million since it launched the device there on Friday.

On the U.S. "fiscal cliff" negotiations, Republican House Speaker John Boehner seems to be in the process of yielding to some of President Barack Obama's main demands including higher tax rates for wealthy Americans, as both sides work toward avoiding falling over the so-called fiscal cliff of tax hikes and spending cuts at the end of the year.

Boehner has suggested an increase in taxes on Americans with incomes exceeding $1 million.

Futures for the Dow Jones Industrial Average were up 3 points, or 30.99 points above fair value, at 13,090. Futures for the S&P 500 were up 1 point, or 3.52 points above fair value, at 1410. Futures for the Nasdaq were down 9 points, or 7.94 points below fair value, at 2614.

Michala Marcussen, global head of economics at Societe Generale, said that while Boehner's tax proposal is positive, it's still a much higher level of income than the $250,000 proposed by the Obama camp and would leave a "gaping" hole in reaching Obama's $1.4 trillion revenue target.

Therefore, "the divide between the two camps still remains significant," said Marcussen.

"Should no agreement result and the full $600 billion cliff go into effect, this would prove highly disruptive for both markets and the economy," said Marcussen. "In such a tail risk scenario we set a 90% probability that the retroactive legislative legislation then passed in early 2013 would reverse part of the cliff."

Major U.S. stock averages slumped Friday as persistent worries about the ability of the U.S. to avert the so-called fiscal cliff and deep losses in Apple shares overshadowed encouraging Chinese manufacturing and U.S. industrial output data.

At 8:30 a.m. EST Monday, the New York Federal Reserve's Empire State manufacturing survey is expected by economists to show an improvement in the general business conditions index to negative one for December, better than the read of negative 5.2 the prior month.

The FTSE 100 in London was sliding 0.62% and the DAX in Germany was off 0.28% Monday.

Japan's Nikkei average finished up 0.94% and Hong Kong's Hang Seng index closed down by 0.42%.