U.S. Stock Futures Drop on Jobless Claims, Stimulus Skepticism

By Jeff Kearns

Feb. 12 (Bloomberg) -- U.S. stock-index futures fell, extending a global drop in equities, as jobless claims climbed to a record and investors speculated government measures will fail to revive the world’s economy.

Wells Fargo & Co., JPMorgan Chase & Co. and Intel Corp. helped lead declines after the total number of Americans collecting unemployment benefits reached 4.81 million. Electricite de France SA, the biggest operator of nuclear reactors, and Diageo Plc, the largest liquor maker, sank more than 7 percent in Europe after posting disappointing results. Treasuries rose for a fourth day, while gold traded near a six- month high as investors sought a haven from risky assets.

Standard & Poor’s 500 Index futures expiring in March dropped 0.8 percent to 824.7 at 8:45 a.m. in New York. Dow Jones Industrial Average futures lost 0.6 percent to 7,846 and Nasdaq- 100 Index futures slid 0.3 percent to 1,221. Futures pared earlier declines after a report showed retail sales unexpectedly increased last month.

President Barack Obama’s stimulus plan will be insufficient to avert the biggest U.S. economic decline since 1946 as consumer spending posts its longest slide on record, according to a monthly Bloomberg News survey. The world’s largest economy will contract 2 percent this year, half a percentage point more than last month’s forecast, according to the survey.

U.S. stocks gained yesterday as lawmakers debated a $789 billion plan to revive the economy. U.S. House and Senate lawmakers agreed on a compromise late yesterday, a smaller bill than originally approved by both groups. Governments worldwide are attempting to stabilize a global economy battered by more than $1 trillion in writedowns and losses at financial companies.

BRICs Outperform

Even with today’s drop, China, along with Brazil and Russia, Are the only major stock markets recording gains of more than 8 percent this year. India, the fourth member of the so-called BRICs, is down 1.9 percent.

Kohl’s Corp. may fall after Goldman Sachs downgraded the department-store chain to “sell” from “neutral” and added the shares to the firm’s “conviction sell” list.

NYSE Euronext slipped 1 percent to $20.40 in France. The world’s largest owner of stock exchanges was cut to “hold” from “buy” at Citigroup Inc., which cited slowing volumes, pricing pressures and an “uphill battle” in expense reductions. The New York-based company, which lost a record $1.34 billion in the fourth quarter after writing down its purchase of Euronext NV, is trying to engineer a recovery by overhauling trading systems to cut $250 million in annual costs by 2010.

Viacom, Chipotle

Viacom Inc., owner of MTV, Comedy Central and Nickelodeon, said fourth-quarter profit excluding some items was 76 cents a share. Analysts surveyed by Bloomberg estimated 79 cents. The stock didn’t trade in Europe.

Chipotle Mexican Grill Inc. may be active. The burrito chain spun off from McDonald’s Corp. reported fourth-quarter profit of 52 cents a share, topping the average analyst estimate by 7.2 percent, according to Bloomberg data.

Earnings fell 36 percent on average at the 349 companies in the S&P 500 that have reported fourth-quarter results so far, according to data compiled by Bloomberg. The period is poised to be the sixth straight quarter of decreasing profits, the longest streak on record.

Results at companies from Microsoft Corp. to Procter & Gamble Co. disappointed investors last quarter as the economy shrank at the fastest pace in 26 years.

In Western Europe, profits have declined 65 percent for 469 companies that have released earnings since Jan. 12, according to Bloomberg data.

To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.