U.S. Stock Futures Fall, Indicate S&P 500 May Trim Weekly Gain

By Daniela Silberstein

Nov. 28 (Bloomberg) -- U.S. stock futures fell, indicating the Standard & Poor’s 500 Index may trim its biggest weekly gain since 1974, as lower oil dragged down energy producers.

Chevron Corp. lost 1.5 percent in Germany as crude slid on speculation a potential OPEC production cut may fail to outweigh declining fuel demand. Intel Corp. retreated 2.4 percent after its European rival STMicroelectronics NV cut its sales forecast. Wal-Mart Stores Inc. declined as U.S. retailers discounted merchandise as much as 70 percent to counter what may be the weakest holiday shopping season in six years.

The S&P 500 surged 11 percent this week as the Federal Reserve committed as much as $800 billion to help resuscitate lending markets and investors speculated President-elect Barack Obama’s economic team will bolster growth. The index has still tumbled 43 percent from its October 2007 record as credit- related losses and writedowns at global financial companies approach $1 trillion. Exchanges were shut yesterday for the Thanksgiving holiday.

“After a lot of good days a backlash wouldn’t be surprising,” said Peter Braendle, who helps oversee $48 billion at Swisscanto Asset Management AG in Zurich. “The lower oil price is a relief for a lot of industries but there are also sectors that suffer.”

Futures on the S&P 500 expiring in December fell 1 percent to 878.3 at 12:44 p.m. in London. Dow Jones Industrial Average futures slid 0.6 percent to 8,644, while Nasdaq-100 Index futures lost 1.3 percent to 1,180. Trading on U.S. exchanges will end at 1 p.m. today.

Weekly Performance

This week’s rally in U.S. stocks helped push the MSCI World Index of 23 developed markets up 11 percent since Nov. 21, the steepest weekly advance since data began in 1970.

Europe’s Dow Jones Stoxx 600 Index fell for the first time in five days today as STMicroelectronics, the region’s largest semiconductor maker, said fourth-quarter revenue and gross margin will miss forecasts after a slowdown in demand from the wireless, automotive and computer peripherals industries.

President-elect Barack Obama yesterday said the U.S. faces a “time of great trial” and an economic recovery won’t come from “policies and plans alone.”

“It will take the hard work, innovation, service and strength of the American people” to end the financial crisis, he said yesterday in his weekly radio address.

Chevron, Oil

Chevron, the second-largest U.S. oil company, retreated 1.5 percent to $78.76. Crude oil for January delivery dropped 1.8 percent to $53.48 a barrel in New York. OPEC members may consider a reduction at their meeting this weekend in Cairo to stabilize the market, Shokri Ghanem, chairman of Libya’s National Oil Corp., said yesterday.

Concerns about oil consumption have increased after reports showed the U.S. economy slowed and consumer spending fell. Gasoline demand dropped 1.3 percent from last week, the Energy Department said in its weekly report.

Wal-Mart, the world’s largest retailer, decreased 0.4 percent to $56.44. Individuals may spend an average of $616 on holiday gifts this year, down 29 percent from a year earlier, according to a Gallup Inc. poll. That raises the pressure on chains facing declining consumer confidence and the prospect of a recession.

‘Black Friday’

Retailers promoted “doorbuster” deals to attract customers today, the day traditionally called “Black Friday.” The day after Thanksgiving is considered to be when retailers start to make their annual profit, having paid off their costs from sales earlier in the year.

Intel, whose chips run more than three-quarters of the world’s computers, sank 2.4 percent to $13.64.

STMicroelectronics said sales will be $2.2 billion to $2.35 billion, down 13 percent to 18 percent from $2.7 billion in the previous quarter. The company had predicted sales being unchanged or falling 8 percent.

To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.