U.S. Stock Futures Retreat as Oil, Foreclosures Rise; AIG Drops

By Michael Patterson

July 25 (Bloomberg) -- U.S. stock-index futures fell as oil gained for a second day and foreclosure filings more than doubled last quarter, renewing concern that increased energy costs and credit losses will restrain global economic growth.

Boeing Co., the second-largest commercial planemaker, declined as crude futures climbed above $126 a barrel. American International Group Inc. dropped after Australia's biggest bank said its mortgage-related losses may jump fivefold. Western Digital Corp. sank after predicting profit and sales below projections. Juniper Networks Inc. rose on higher forecasts.

Standard & Poor's 500 Index futures expiring in September fell 1.4 to 1,252.4 as of 11:56 a.m. in London. Dow Jones Industrial Average futures declined 13 to 11,338. Nasdaq-100 Index futures slipped 2 to 1,817.5. Asian stocks retreated as National Australia Bank Ltd. plunged the most since the 1987 stock market crash, while financial companies led European shares lower for a second day.

``The reality is starting to set in that there may be another shoe to drop out there,'' Eric Thorne, who helps oversee about $2.6 billion as an investment adviser at Bryn Mawr Trust Co., said in an interview on Bloomberg Television yesterday from Philadelphia. ``You look at some of the housing data and that continues to be really bad.''

The S&P 500 is poised to fall for the seventh week since May after the biggest retreat in bank shares since 2000 sent the index to a 2.3 percent drop yesterday. Investors may get clues on the outlook for economic and profit growth today as the Commerce Department releases its June report on durable goods orders and companies including Black & Decker Corp. report earnings.

Bear Markets

The S&P 500 has dropped 0.7 percent this week and the Dow average has declined 1.3 percent. The Nasdaq Composite Index is down 0.1 percent.

All of the 23 developed nations in the MSCI World Index except for Canada experienced bear-market plunges of 20 percent or more since September as credit losses surged and record commodity prices stoked inflation. Brazil became the 23rd out of 25 developing countries in the MSCI Emerging Markets Index to enter a bear market yesterday. Only Jordan and Morocco avoided such slumps.

Boeing lost 14 cents to $62.39 in Germany. Crude oil for September delivery gained as much as 81 cents, or 0.7 percent, to $126.30 a barrel in New York on concern supply in Iran and Nigeria may be disrupted.

Western Digital

Western Digital, the second-largest maker of hard-disk drives, sank $3.03 to $30.59 in Germany. Profit will be 81 cents to 89 cents this quarter, the company said. Analysts had estimated 98 cents on average, according to a Bloomberg survey. Sales will rise 3 percent to 8 percent in the period, also falling short of projections.

AIG, which has units that originate, insure and invest in home loans, declined 37 cents to $27.06 in Germany.

U.S. foreclosure filings more than doubled in the second quarter from a year earlier as falling home prices left borrowers owing more on mortgages than their properties were worth.

One in every 171 U.S. homeowners lost their house to foreclosure, received a default notice or was warned of a pending auction, an increase of 121 percent from a year earlier and a 14 percent rise from the first quarter, RealtyTrac Inc. said today.

National Australia set aside an additional A$830 million for collateralized debt obligations. The move may cut profit for the fiscal year that ends Sept. 30 by almost A$600 million, Chief Financial Officer Mark Joiner said in an interview. That would equal about 13 percent of 2007 net income.

Crocs, Interactive Brokers

Crocs Inc. plunged $3.97 to $4.98 after the company forecast earnings lower than its previous prediction, raising concern that it may not be able to sell its colored foam clogs profitably.

Interactive Brokers Group Inc. lost $4.20 to $28. The brokerage that handles 14 percent of equity options worldwide posted second-quarter profit that rose less than analysts estimated because of smaller gains from market making.

Juniper Networks gained $2.45 to $25.02. The second-largest maker of networking equipment reported a 40 percent jump in profit and raised its forecasts for the year as phone companies boost spending.

The Commerce Department may report that bookings for goods meant to last several years fell 0.3 percent after being unchanged in May, according to the median estimate in a Bloomberg News survey of 78 economists. Other reports today may show sales of new houses fell and consumer sentiment matched a 28-year low. The durable goods figures are due at 8:30 a.m. New York time.

To contact the reporter on this story: Michael Patterson in London at mpatterson10@bloomberg.net.