By Adria Cimino
Nov. 17 (Bloomberg) -- U.S. stock futures fell, indicating the Standard & Poor's 500 Index will extend a two-week slump, as investors speculated reports today may add to evidence the economy is deteriorating.
General Electric Co. and Boeing Co. retreated before figures on manufacturing and industrial production. Citigroup Inc., the fourth-biggest U.S. bank by market value, slipped 2 percent after saying it plans to cut 50,000 jobs. Dell Inc., the second-biggest personal-computer maker, declined 3.3 percent after Merrill Lynch & Co. cut its recommendation on the stock, saying PC sales will drop. Lowe's Cos. sank 3.9 percent as its fourth-quarter earnings forecast missed analysts' estimates.
S&P 500 futures expiring in December slipped 0.6 percent to 856 at 8:16 a.m. in New York. Dow Jones Industrial Average futures decreased 0.7 percent to 8,309 and Nasdaq-100 Index futures fell 0.4 percent to 1,150.75.
``Everyone knows the data won't be good,'' said Jacques Porta, who helps manage about $180 million at Ofivalmo Patrimoine in Paris. ``The question is about 2009 now, 2008 was a catastrophe.''
A report from the Federal Reserve Bank of New York at 8:30 a.m. local time will probably show its Empire State index in November dropped to minus 26, the lowest level since record keeping began in 2001, according to the median in a Bloomberg survey. The figures on U.S. October industrial production are scheduled for release at 9:15 a.m.
`Fairly Valued'
A 9.9 percent decline in the S&P 500 so far this month left the index valued at 18.8 times earnings, near the lowest since September 2007. U.S. stocks tumbled on Nov. 14, capping a second straight weekly loss, as a record decrease in retail sales and weaker demand for mobile phones raised concern about the depth of the recession.
The KBW Bank Index's retreat to a 12-year low last week may signal investors in U.S. financial stocks are ``ignoring'' an improvement in credit markets since October that's unlikely to reverse, according to Morgan Stanley.
The financial sector is ``fairly valued to moderately cheap,'' Abhijit Chakrabortti, Morgan Stanley's New York-based head of global equity strategy, wrote in a research note dated yesterday. He recommended shares of Wells Fargo & Co., JPMorgan Chase & Co., PNC Financial Services Group Inc., Bank of New York Mellon Corp. and State Street Corp.
The S&P 500 is down 41 percent this year as credit-related losses and writedowns at financial firms worldwide topped $965 billion, threatening global economic growth. The gauge is on course for the steepest annual decline since 1931.
Earnings Watch
Profits slumped 17 percent on average at companies in the S&P 500 that have reported third-quarter results, according to Bloomberg data. Analysts expect an 8.5 percent drop in full-year earnings, based on estimates compiled by Bloomberg.
Boeing retreated 0.8 percent to $40.72 in Germany.
Dell was downgraded to ``neutral'' from ``buy'' at Merrill Lynch, which said PC sales will decline next year as companies cut spending amid a slumping economy. The stock slipped 3.3 percent to $10.53 in German trading.
Lowe's dropped 3.9 percent to $17.51 in early New York trading. The company said it expects fourth-quarter earnings per shares of 8 cents to 16 cents, compared with an 18 cent estimate in a survey of analysts.
Citigroup Cuts
Citigroup Inc. fell 20 cents, or 2.1 percent, to $9.32 in trading before the open of U.S. exchanges. The bank plans to cut about 14 percent of its workforce as of Sept. 30, and reduce expenses by 20 percent from their peak as the global economy contracts.
Chief Executive Officer Vikram Pandit is scheduled to announce the plan to employees today. The reductions were disclosed in a presentation posted on New York-based Citigroup's Web site.
General Motors Corp., seeking a federal bailout as its cash dwindles, climbed 6.3 percent to $3.20. The automaker will raise 22.4 billion yen ($230 million) by selling its 3 percent stake in Suzuki Motor Corp. The Japanese company said it will use cash to buy back its own shares.
McDonald's Corp., the world's largest restaurant company, added 7 cents to $56.20. UBS AG lifted its the recommendation on the stock to ``buy'' from ``neutral.''
``We are increasingly encouraged with McDonald's ongoing strong global trends amid a deteriorating global consumer environment,'' analysts wrote in a note to clients.
The brokerage also upgraded Yum! Brands Inc., owner of the Pizza Hut, Taco Bell and KFC chains, to ``buy'' from ``neutral,'' citing a recent share-price drop and potential for ``meaningful'' earnings-per-share growth. Yum! gained 40 cents to $25.38.
Dubai Group, an investment company managing more than $40 billion on behalf of Dubai's ruler, plans to buy stakes in U.S. real-estate and asset management companies to profit from low prices. The group, which has already spent as much as $3.5 billion in the U.S., is focusing on the world's biggest economy because it has the potential to recover quicker from the global financial crisis than Europe, Chairman Soud Ba'alawy said today in an interview at a conference in Dubai.
To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.
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