Futures retreat on GE downgrade
US stock-index futures fell after JPMorgan Chase & Co cut its earnings estimate on General Electric Co and New York manufacturing decreased more than forecast in June.
GE, the world's biggest maker of electricity generation equipment, slid after JPMorgan said profits may be at risk from an "increasingly challenging" economic outlook. Honeywell International Inc and United Technologies Corp retreated after the Federal Reserve Bank of New York's general economic index contracted at more than four times the rate economists had projected. Carnival Corp, the world's largest cruise-line company, dropped as oil prices advanced.
Standard & Poor's 500 Index futures expiring in September lost 5.5, or 0.4 percent, to 1,354.2 at 8:58 am in New York. Dow Jones Industrial Average futures declined 51 to 12,251 and NASDAQ-100 Index futures decreased 9 to 1,965.5.
The S&P 500 posted its first back-to-back weekly decline since March last week after the Federal Reserve signaled it may raise interest rates and Lehman Brothers Holdings Inc's $2.8 billion loss renewed speculation that banks face more writedowns.
GE lost 40 cents to $28.75. JPMorgan analyst C. Stephen Tusa lowered his 2009 earnings estimate to $2.30 a share from $2.42 to reflect "challenges in the operating environment".
"We can no longer recommend the stock with the degree of earnings headwind and uncertainty associated with a necessary change in strategy," Tusa wrote in a note to clients.
Honeywell fell 59 cents to $55.90. United Technologies lost 24 cents to $68.32 in Germany.
The Federal Reserve Bank of New York's general economic index dropped to minus 8.7 from minus 3.2 a month earlier, the bank said.
Agencies
(China Daily 06/17/2008 page17)