U.S. Stock-Index Futures Retreat on Concern Growth Is Faltering
U.S. stock futures slid, indicating the Standard & Poor’s 500 Index may post its longest losing streak since October 2008, amid concern that growth in the world’s largest economy is faltering.
ConocoPhillips (COP), the third-biggest U.S. oil company, fell in German trading as the price of crude oil declined. Alcoa Inc. (AA) and Freeport-McMoRan Copper & Gold Inc. (FCX) also retreated in Europe. NYSE Euronext lost 2.2 percent in France after reporting lower profit.
S&P 500 futures expiring in September fell 0.4 percent to 1,274 at 7:10 a.m. in New York, signaling the benchmark gauge may retreat for a seventh consecutive day. Dow Jones Industrial Average futures lost 42 points, or 0.4 percent, to 11,998 today.
“There is growing concern that the U.S. may relapse back into a recession,” said Mike Lenhoff, chief strategist at Brewin Dolphin Securities Ltd. in London. “With the numbers being what they are, it has begun to influence people’s thoughts. I still think it could be just a soft patch.”
Stocks slid yesterday after data showed U.S. manufacturing industry expanded at the slowest pace in two years, erasing an earlier rally after lawmakers agreed to raise the debt ceiling.
The selloff brought the S&P 500 momentarily below its average price of the last 200 days of about 1,285. A drop below the 200-day moving average might trigger further losses, according to analysts who study charts to make forecasts.
An economic report today, due at 8:30 a.m. New York time, may show U.S. consumer spending stalled in June. Purchases rose 0.1 percent last month after being little changed in May, according to the median economist estimate in a Bloomberg News survey. Personal incomes probably rose 0.2 percent, the smallest gain in seven months.
Separately, congressional leaders have voiced confidence the Senate will vote today to ratify a U.S. debt-limit compromise that will avert a default. The House voted 269-161 yesterday to approve the measure, which raises the federal debt ceiling far enough to fund the government until 2013.
Both S&P and Moody’s Investors Service are still weighing whether to cut the U.S. credit rating. S&P said in July that the impasse boosted to 50 percent the chance that it will downgrade the U.S. from AAA within three months.
“The markets are discounting a significant amount of negative news,” said Bob Parker, a London-based senior adviser at Credit Suisse Asset Management, on Bloomberg Television. “The downside on equities is very limited. Investor cash positions are very high, corporate cash positions are very high and valuations are cheap.”
Conoco slid 0.8 percent to $71.44 as crude oil declined for a third day, its longest losing streak since May.
Separately, Conoco said it aims to triple the value of its assets in Australia in the next decade. The company approved the first stage of a $20 billion liquefied natural gas project in the Pacific nation last week.
Alcoa, the largest U.S. aluminum producer, lost 1 percent to $14.60 in Germany, while Freeport, the world’s biggest publicly traded copper producer, declined 0.8 percent to $52.75.
NYSE Euronext (NYX), the U.S. exchange company planning to be bought by Deutsche Boerse AG, retreated 2.2 percent to $32.29 in Paris. The company reported a 16 percent decline in second- quarter profit to $154 million as revenue from European derivatives and U.S. equity trading decreased.
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