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U.S. Stock-Index Futures Retreat; S&P 500 Heads for Weekly Drop

U.S. stock-index futures retreated, indicating the Standard & Poor’s 500 Index will extend its weekly drop, as investors awaited reports on consumer confidence and retail sales to gauge the strength of the economic recovery.

Intel Corp. declined 1.4 percent in European trading as two people familiar with the matter said Nvidia Corp. is working on a microprocessor for tablet devices that would directly compete with Intel products. Freeport-McMoRan Copper & Gold Inc. climbed as gold rose for a second day.

September contracts on the S&P 500 fell 0.3 percent to 1,075.5 as of 7:48 a.m. in New York. Dow Jones Industrial Average futures dropped 0.2 percent to 10,247, while Nasdaq-100 Index futures declined 0.4 percent to 1,820.

“Consumer confidence and retail sales will be crucial data this afternoon as the U.S. economy is very dependent on consumption,” said Michael Koehler, the head of strategy at Landesbank Baden-Wuerttemberg in Mainz, Germany. “The recovery will take time and the equity market will remain nervous in the coming weeks.”

U.S. stocks fell yesterday, sending the S&P 500 to the biggest three-day decline since July 1, after an unexpected increase in unemployment claims added to evidence the economy is weakening. The gauge has retreated 3.4 percent so far this week as the Federal Reserve said the pace of recovery will probably be “more modest” than forecast.

‘Double Dip’

“As signs of slower U.S. growth have multiplied, market participants have become worried about the possibility of a double-dip recession,” Ed McKelvey, Goldman Sachs Group Inc.’s senior U.S. economist in New York, wrote in a note to clients. “The probability is unusually high -- between 25 percent and 30 percent.”

Stocks retreated in Europe today amid renewed concern that the region’s sovereign debt crisis will curb economic growth in the second half of the year.

The yield premium that investors demand to hold Greek 10-year bonds instead of benchmark German debt of similar maturity rose to 800 basis points for the first time since June 28. Demand fell at an auction of Italian debt.

European stocks had opened higher as Germany’s economy grew in the second quarter at the fastest pace since the country’s reunification two decades ago. German gross domestic product surged 2.2 percent from the first quarter, fueling euro-area growth of 1 percent, the fastest in four years. Economists had forecast GDP would rise 1.3 percent in Germany and 0.7 percent in the currency bloc.

Growth Differential

Germany’s performance highlights the growth differential across the euro region in a quarter that saw the Greek fiscal crisis threaten to break the bloc apart. France’s economy expanded 0.6 percent in the period, Italy’s 0.4 percent and Spain’s 0.2 percent, while Greece experienced a 1.5 percent contraction.

U.S. Retail sales increased 0.5 percent in July after a 0.5 percent drop the prior month, according to the median estimate of 77 economists surveyed by Bloomberg News before the Commerce Department’s data is released at 8:30 a.m. in Washington.

The preliminary Reuters/University of Michigan confidence index for August is forecast to increase to 69 from 67.8 in July, economists said. The report is due at 9:55 a.m. Other data may show consumer prices were restrained and business inventories gained.

Intel declined 1.4 percent to $19.17 in Switzerland. Nvidia has a team of engineers developing chips that could be used by computer makers instead of Intel, said the people, who declined to be identified because the project hasn’t been made public. Nvidia began working on a tablet chip after an earlier effort to create laptop processors didn’t pan out, the people said. Those chips weren’t cheap enough to compete with Intel’s Atom chips, according to the people.

Nvidia shares rose 2.7 percent to $8.96 in early New York trading.

Freeport-McMoRan, owner of the world’s largest gold mine, climbed 0.7 percent to $70.89 in early New York trading as gold traded at a four-week high in London.

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