U.S. Stock-Index Futures Decline; Apple and Exxon Shares Fall

By Sarah Jones

Oct. 31 (Bloomberg) -- U.S. stock-index futures fell, indicating the Standard & Poor's 500 Index may extend its worst monthly drop since 1987, after a report showed spending by U.S. consumers dropped more than forecast last month.

Apple Inc. slipped 1.1 percent. Separate data may show consumer confidence plunged by the most on record this month. Exxon Mobil Corp. led energy companies lower as crude oil declined for a second day.

Futures on the S&P 500 expiring in December dropped 14.1, or 1.5 percent, to 947.4 at 12:33 p.m. in London. Dow Jones Industrial Average futures lost 127, or 1.4 percent, to 9,099, while Nasdaq-100 Index futures decreased 22.75, or 1.7 percent, to 1,322.25.

``The U.S. economy will deteriorate and remain at negative to low levels of growth for a sustained period,'' said Simon Carter, who manages about $3 billion at Aegon Asset Management in Edinburgh. ``This will make it hard for investor to look through on companies that need a better environment to prosper.''

The S&P 500, down 35 percent in 2008, has slumped 18 percent in October alone as central banks and governments from Washington to Tokyo stepped up efforts to salvage the global economy amid the deepest financial crisis since the Great Depression.

The Dow average has lost 15 percent and the Nasdaq has dropped 19 percent in October. This month's sell-off erased more than $9.5 trillion from the value of stocks worldwide, almost one-third of the total value lost this year, as credit-related losses and writedowns by financial firms topped $684 billion.

Economy Watch

A Commerce Department report today showed that spending by U.S. consumers dropped more than forecast in September, capping its weakest quarter in three decades and signaling the economy will continue to slump in coming months.

The 0.3 percent decrease in purchases was the biggest in four years and followed no change in August, the Commerce Department said today in Washington. The Federal Reserve's preferred measure of inflation cooled.

Exxon, the world's biggest oil company, fell 1.4 percent to $74.02 in Germany. Crude oil declined in New York, poised for its biggest monthly drop since trading began in 1983, on concern that the decline in the U.S. economy will curb fuel demand in the world's largest energy user.

Third-Quarter Earnings

Intel Corp. declined 3.1 percent to $15.67 in Germany after the world's largest computer-chip maker said the global financial crisis could hurt its business.

``The recent financial crisis could negatively affect our business, results of operations and financial condition,'' the company said in the risk factors section in its 10-Q quarterly filing with the Securities and Exchange Commission today.

Earnings at the 324 companies in the S&P 500 that have reported third-quarter results dropped an average 12 percent from a year earlier, according to Bloomberg data.

NYSE Euronext slid 8.9 percent to $25.59 in German trading. The world's biggest owner of stock exchanges said third-quarter profit declined 33 percent after it cut fees and trading slowed on the European derivatives market.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.