By Adam Haigh and Eric Martin
Jan. 13 (Bloomberg) -- U.S. stock-index futures slipped, indicating the Standard & Poor’s 500 Index may fall for a third day, as declining commodity prices dragged down metal and oil producers and Alcoa Inc. reported a wider loss than estimated.
Exxon Mobil Corp. retreated as crude slid below $37 a barrel on expectations demand will decrease amid the recession. Alcoa, the largest U.S. aluminum producer, slipped 1.5 percent in New York after reporting its first quarterly net loss in six years.
“It was quite a big miss from Alcoa,” said Kully Samra, U.S. equity markets analyst at Charles Schwab U.K. Ltd. in London. “There is still a lot of uncertainty out there on commodities and the economy.”
Futures on the S&P 500 expiring in March retreated 0.2 percent to 866 at 8:47 a.m. in New York, indicating the U.S. benchmark may extend this year’s losses. Dow Jones Industrial Average futures fell 15 points, or 0.2 percent, to 8,429. Nasdaq- 100 Index futures declined less than 0.1 percent to 1,205.75.
The S&P 500 has dropped 3.7 percent in 2009 as companies from Alcoa to Intel Corp. and Wal-Mart Stores Inc. spurred concern earnings will deteriorate, while the unemployment rate in the U.S. climbed to the highest level in almost 16 years.
Stocks in Europe and Asia declined the most in a month. Europe’s Dow Jones Stoxx 600 Index sank 2.5 percent and the MSCI Asia Pacific Index slid 3.4 percent.
Concern that equity losses will deepen pushed stock-market volatility in Europe higher for a second day. The dollar traded at the weakest level versus the yen since Dec. 19 as the slump in stocks boosted the Japanese currency’s attractiveness as a haven.
Earnings Slump
Profits for companies in the S&P 500 probably fell 20 percent in the fourth quarter of 2008, a sixth straight quarter of declines, according to analysts’ estimates compiled by Bloomberg. Income probably dropped 65 percent at raw-materials producers.
Alcoa slid 1.5 percent to $9.91. The largest U.S. aluminum producer reported a fourth-quarter net loss of $1.19 billion because of “historic” price declines and said demand for the metal may continue to weaken in 2009.
Copper dropped 2.6 percent to $3,162 a ton in London, sliding for a second day as inventories reached a five-year high. Aluminum, zinc and nickel also fell.
Exxon declined 0.5 percent in New York to $76.16 after crude extended yesterday’s 7.9 percent slump on speculation oil inventories increased last week.
The contract for February delivery fell as much as 4 percent to $36.10 a barrel today in New York, a sixth day of losses.
Growth Forecasts
Economists slashed forecasts for U.S. growth in 2009 and projected Federal Reserve policy makers won’t be able to start raising interest rates until 2010, according to a monthly Bloomberg News survey.
The world’s largest economy will contract 1.5 percent this year, a half percentage point more than projected last month, according to the median of 59 forecasts in the survey.
Stock futures fell as Fed Chairman Ben S. Bernanke warned that a fiscal stimulus won’t be enough to spur an economic recovery and that the government may need to buy or guarantee banks’ tainted assets to revive growth.
“Fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system,” Bernanke said in the text of a speech at the London School of Economics. “More capital injections and guarantees may become necessary to ensure stability and the normalization of credit markets.”
Volatility, Credit Spreads
The benchmark index for European options, the VStoxx Index, climbed 8.1 percent to 47.88, bringing its two-day advance to 16 percent, the largest in two months. The gauge, which measures the cost of using options as insurance against declines in the Euro Stoxx 50 Index, surged to 87.51 in October, the highest since at least 2001, data compiled by Bloomberg show.
While stock-market volatility climbed, declines in measures of borrowing costs suggested that government efforts to slash interest rates and lend unprecedented amounts of cash directly to banks are helping thaw credit markets.
The London interbank offered rate, or Libor, that banks say they charge each other for such loans slid seven basis points to 1.09 percent, the lowest level since June 2003, according to British Bankers’ Association data. The difference between how much the U.S. Treasury and banks pay for three-month loans, the so-called TED spread, dropped below 100 basis points for the first time in five months.
Synovus Financial Corp. lost 13 percent to $5.76. The Georgia-based lender that posted five quarters of lower profit, Comerica Inc. and Huntington Bancshares Inc. are among regional banks that may face a second wave of real-estate loan losses, this time for shopping centers and residential construction projects.
To contact the reporters on this story: Adam Haigh in London at ahaigh1@bloomberg.net; Eric Martin in New York at emartin21@bloomberg.net.
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