By Adam Haigh
Dec. 1 (Bloomberg) -- U.S. stock futures declined, indicating the Standard & Poor’s 500 Index may snap a five-day gain, as investors speculated reports today will signal a further deterioration of the economy.
General Electric Co. and Lockheed Martin Corp. dropped at least 1 percent in Germany before figures from the Institute for Supply Management that may show manufacturing contracted in November at the fastest pace in 26 years. ConocoPhillips led energy producer lower as crude oil slid in New York. Freeport- McMoRan Copper & Gold Inc. retreated 1.2 percent after manufacturing in China shrank by the most on record, dragging down copper prices.
Futures on the S&P 500 expiring in December sank 20.2 to 875.1 at 7:07 a.m. in New York. The index had its biggest weekly gain in more than 30 years last week after the government agreed to protect Citigroup Inc. from further losses and automakers weighed cutting costs to win federal aid. Dow Jones Industrial Average futures today fell 164 to 8,657. Nasdaq-100 Index futures declined 25 to 1,161.
“There has been a horrible destruction of value,” said Charles Mackinnon, chief investment officer at Thurleigh Investment Managers LLP in London. “This is a new world. There is opportunity for further significant falls,” he told Bloomberg Television.
The S&P 500 is down 39 percent this year as credit losses and writedowns at the world’s largest financial firms approach $1 trillion and economists increasingly forecast that the U.S. recession will be one of the most severe in the postwar era.
Today will be the first full day of trading following the Thanksgiving holiday Nov. 27 and a shorter session Nov. 28.
Annual Loss
As the S&P 500 heads for its worst performance since 1931 the best money managers say Swiss industrial companies, Texas oil drillers and Japanese robot makers are too cheap to pass up. Fund managers Phillip Davidson, Stephen Docherty and Eric Cinnamond say they are all taking advantage by buying shares they say were unfairly punished.
GE, the world’s biggest maker of power-generation equipment, slid 1.4 percent to $16.93 in Germany. Lockheed, the largest defense company, declined 1.7 percent to $75.79.
The ISM manufacturing index dropped to 37 last month, the lowest level since 1982, from 38.9 in October, according to the median estimate in a Bloomberg News survey. A reading of 50 is the dividing line between expansion and contraction.
‘Much Lower’
ConocoPhillips lost 1.4 percent to $51.76 in German trading, while Exxon Mobil Corp. slipped 1.1 percent to $79.27. Crude oil for January delivery declined as much as 4.9 percent to $51.78 a barrel in New York.
Slowing global growth means demand will be “much lower” than expected a month ago, the Organization of Petroleum Exporting Countries said after its Nov. 29 meeting in Cairo, deferring a decision to reduce output for another two weeks.
Freeport-McMoRan, the world’s largest publicly traded producer of copper and molybdenum, retreated 1.2 percent to $23.70 in German trading.
Copper fell for a second day in Shanghai after China’s contraction in manufacturing signaled the growing risk of a slump in the world’s biggest consumer of the metal.
To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.
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