U.S. Stock Futures Decline; Deere, Macy's, Wal-Mart Retreat

By Michael Patterson

Aug. 13 (Bloomberg) -- U.S. stock-index futures dropped as profit from Deere & Co. trailed analysts' projections and Macy's Inc. said full-year earnings may fall more than previously forecast.

Deere, the largest maker of farm equipment, declined 8.1 percent. Macy's, the second-biggest U.S. department store chain, retreated after reporting a 2.1 percent slump in second-quarter same-store sales. Wal-Mart Stores Inc. fell before a Commerce Department report forecast to show that retail sales decreased for the first time in five months.

Standard & Poor's 500 Index futures expiring in September lost 6.9, or 0.5 percent, to 1,284.6 as of 8:26 a.m. in New York. Dow Jones Industrial Average futures fell 55 to 11,590. Nasdaq- 100 Index futures slipped 2.75 to 1,942. Asian shares declined after Japan's economy contracted, while stocks in Europe sank on concern bank losses will deepen.

``To go out and try and speculate where the bottoms are is always a risky approach to the market,'' Stephen Pope, the London-based chief global market strategist at Cantor Fitzgerald, said in an interview on Bloomberg Television. ``We can easily end up with some damage being caused and suddenly you're long and wrong.''

U.S. stocks dropped yesterday after JPMorgan Chase & Co. said it may post more credit losses and analysts cut profit estimates for Goldman Sachs Group Inc. The S&P 500's 12 percent decline this year is the second-best performance among benchmark indexes in the world's 20 biggest equity markets, according to data compiled by Bloomberg. The gauge has rallied 6.2 percent from an almost three-year low last month as crude prices sank more than 20 percent from a record.

Earnings Watch

Profits at S&P 500 companies that reported results since July 8 beat analysts' estimates in seven of 10 industries, according to data compiled by Bloomberg. Results at financial and consumer companies were dragged down by losses at banks including Merrill Lynch & Co. and carmaker General Motors Corp.

Deere retreated $5.62 to $63.35 in early New York trading. Third-quarter profit was $1.32 a share, missing the $1.37 average of 17 analyst estimates compiled by Bloomberg.

Macy's lost 38 cents to $19.89.

Wal-Mart, the world's largest retailer, slipped 21 cents to $59.04 in Germany. McDonald's Corp., the largest restaurant company, retreated 32 cents to $63.63.

Economy Watch

Retail sales probably fell 0.1 percent after a 0.1 percent gain the prior month, according to the median of 75 estimates in a Bloomberg survey. The report is due at 8:30 a.m. in Washington.

Sales excluding automobiles climbed 0.5 percent in July, according to the survey median. Higher gasoline prices probably increased spending at service stations and boosted the sales figure, economists said.

The Labor Department may report at the same time that import prices in July rose 1 percent, according to the survey median. That would compare with a 2.6 percent gain the prior month, when the cost of imported petroleum surged 8 percent.

WellCare Health Plans Inc. dropped $2.20 to $40 in early New York trading. The U.S. managed-care provider being investigated for possible fraud said it may report a loss for the first half of the year because of increased legal expenses and rising costs in Medicare drug plans.

Applied Materials, Nvidia

Applied Materials Inc., the largest maker of semiconductor- production machinery, added 35 cents to $18.82 in Germany. The company said orders will increase between 5 percent and 10 percent in the fourth quarter, which ends in October, from the previous three months. Orders last quarter had fallen 16 percent from the previous period.

Nvidia Corp. jumped 92 cents to $11.99 in Germany. The second-biggest maker of computer-graphics chips increased its stock repurchase plan to $2.7 billion, or about 44 percent of shares outstanding. Nvidia also posted its first quarterly loss in six years.

CVS Caremark Corp. may be active. The second-biggest U.S. drugstore chain agreed to buy Longs Drug Stores Corp. for $2.7 billion to add pharmacies in the two fastest growing U.S. states. The shares didn't trade in Europe.

U.S. stocks pulled ahead of Brazil, Russia, India and China this week for the first time in 2008, spurred by the Federal Reserve's efforts to cut borrowing costs even as the biggest developing countries are raising theirs, according to Bloomberg data.

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