U.S. Stock Futures Fall, Indicate S&P 500 May Trim Weekly Gain
By Daniela Silberstein
Nov. 28 (Bloomberg) -- U.S. stock futures fell, indicating the Standard & Poor’s 500 Index may trim its biggest weekly gain since 1974, as lower oil dragged down energy producers.
Exxon Mobil Corp. lost almost 1 percent in Germany as crude slid on speculation a potential OPEC production cut may fail to outweigh declining fuel demand. Wal-Mart Stores Inc. declined 1 percent as U.S. retailers discounted merchandise as much as 70 percent to counter what may be the weakest holiday shopping season in six years.
The S&P 500 surged 11 percent this week as the Federal Reserve committed as much as $800 billion to help resuscitate lending markets and investors speculated President-elect Barack Obama’s economic team will bolster growth. The index has still tumbled 43 percent from its October 2007 record as credit- related losses and writedowns at global financial companies approach $1 trillion. Exchanges were shut yesterday for the Thanksgiving holiday.
“After a lot of good days a backlash wouldn’t be surprising,” said Peter Braendle, who helps oversee $48 billion at Swisscanto Asset Management AG in Zurich. “The lower oil price is a relief for a lot of industries but there are also sectors that suffer.”
Futures on the S&P 500 expiring in December fell 0.5 percent to 882.7 at 10:15 a.m. in London. Dow Jones Industrial Average futures slid 0.3 percent to 8,675, while Nasdaq-100 Index futures lost 0.9 percent to 1,185. Trading on U.S. exchanges will end at 1 p.m. today.
Exxon, Oil
Exxon slid 0.8 percent to $80.22 in Germany. Crude oil for January delivery dropped 2.8 percent to $52.93 a barrel in New York. OPEC members may consider a reduction at their meeting this weekend in Cairo to stabilize the market, Shokri Ghanem, chairman of Libya’s National Oil Corp., said yesterday.
Concerns about oil consumption have increased after reports showed the U.S. economy slowed and consumer spending fell. Gasoline demand dropped 1.3 percent from last week, the Energy Department said in its weekly report.
Wal-Mart, the world’s largest retailer, lost 1 percent to $56.15. Individuals may spend an average of $616 on holiday gifts this year, down 29 percent from a year earlier, according to a Gallup Inc. poll. That raises the pressure on chains facing declining consumer confidence and the prospect of a recession.
Retailers promoted “doorbuster” deals to attract customers today, the day traditionally called “Black Friday.” The day after Thanksgiving is considered to be when retailers start to make their annual profit, having paid off their costs from sales earlier in the year.
To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.
Last Updated: November 28, 2008 05:25 EST
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