U.S. Stock-Index Futures Fall; Goldman, JPMorgan Shares Retreat

By Adam Haigh and Lynn Thomasson

Aug. 12 (Bloomberg) -- U.S. stock futures fell after analysts said slumping equity markets will hurt earnings at Goldman Sachs Group Inc. and JPMorgan Chase & Co. warned it will post a $1.5 billion writedown on mortgage assets.

Goldman tumbled after Deutsche Bank AG and Oppenheimer & Co. reduced earnings estimates for the biggest U.S. securities firm. JPMorgan declined after the bank said trading conditions ``have substantially deteriorated'' since July. AMR Corp., parent of American Airlines, and General Motors Corp., the largest U.S. automaker, advanced as oil retreated below $113 a barrel.

Futures on the Standard & Poor's 500 Index expiring in September slipped 0.9, or less than 0.1 percent, to 1,304.2 at 8:13 a.m. in New York. Dow Jones Industrial Average futures decreased 10 to 11,759. Nasdaq-100 Index futures added 4.75 to 1,947.75.

The S&P 500 has slumped 17 percent from its 2007 high as credit losses approaching $500 billion, accelerating inflation and record fuel prices curb profit growth.

Second-quarter earnings at the 429 companies in the S&P 500 that have released results since July 8 are down 23 percent on average from a year earlier, according to data compiled by Bloomberg. Financial companies suffered the deepest declines, with profits down 91 percent.

Goldman, JPMorgan

Goldman fell $3.99 to $174.01. Deutsche Bank cut its recommendation on the shares to ``hold'' from ``buy.'' The brokerage also reduced its price estimate on the stock 8.1 percent to $192, saying earnings are likely to be weaker than consensus estimates. Oppenheimer's Meredith Whitney lowered her profit estimates for Goldman for 2008 and 2009

JPMorgan lost 49 cents to $41.40 after saying it expects the global economy ``to continue to be weak, for capital markets to remain under stress and for a continued decline in U.S. housing prices,'' according to a regulatory filing yesterday.

``Sharply widened'' spreads on mortgage-backed securities and loans have caused losses, the bank said.

Citigroup retreated 25 cents to $19.57. The biggest U.S. bank by assets has dropped 33 percent this year.

Billionaire investor Michael Price is betting on further declines at Citigroup, which he said has ``more pain coming.'' Price runs New York-based MFP Investors LLC and was chairman and chief executive officer of Franklin Mutual Advisers LLC in Short Hills, New Jersey.

AMR Corp., the owner of American Airlines, the world's largest carrier, climbed 29 cents to $12.47 after JPMorgan upgraded the shares to ``overweight'' from ``underweight,'' saying profits are likely to resume in 2009 due to the recent drop in oil prices.

Delta Air Lines Inc. gained 36 cents to $9.70. Goldman Sachs lost $2.06 to $175.84.

GM climbed 10 cents to $10.86.

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To contact the reporters on this story: Adam Haigh in London at ahaigh1@bloomberg.net; Lynn Thomasson in New York at lthomasson@bloomberg.net.