By Alexis Xydias Dec. 17 (Bloomberg) -- U.S. stock-index futures declined, indicating the Standard & Poor’s 500 Index will retreat from a five-week high, on concern that the Federal Reserve has few tools left to combat the deepening recession. Goldman Sachs Group Inc., the securities firm that reported its first quarterly loss yesterday, fell 1.5 percent in Germany, while International Business Machines Corp., the world’s largest provider of computer services, lost 2.4 percent. Futures suggested the S&P 500 will decline after a 5.1 percent rally yesterday spurred by the Fed’s move to cut its benchmark interest rate to as low as zero. The central bank’s decision came after simultaneous recessions in the U.S., Europe and Japan dragged the S&P 500 down almost 45 percent from its 2007 record. “Following interest-rate cuts you always see an initial reaction and then you get back to your senses,” said Joost Van Leenders, strategist at Fortis Investments in Amsterdam, which oversees $305 billion. “All the structural indicators, such as the economic cycle and profit outlook, remain negative.” S&P 500 futures expiring in March lost 1.5 percent to 898.9 as of 8:08 a.m. in New York. Dow Jones Industrial Average futures slipped 1.3 percent to 8,775 and Nasdaq-100 Index futures decreased 1.1 percent to 1,228. Europe’s Dow Jones Stoxx 600 Index slid 0.4 percent, as BNP Paribas SA tumbled as much as 17 percent after saying losses at its securities unit since October more than wiped out the division’s profit for the first three quarters of the year. Fed Decision Days Yesterday’s advance in the S&P 500 was its biggest on a Fed rate-decision day since 1994, when the central bank began announcing its target on the same day the decision was made, according to Bespoke Investment Group LLC. The rally put the index above its average level during the past 50 days for the first time since September. The Fed cut its target rate for overnight loans between banks to a range of zero to 0.25 percent. The Fed said in its statement that the recession is likely to warrant exceptionally low levels of the federal funds rate “for some time.” The statement noted that the Fed has already announced it will purchase agency debt and mortgage-backed securities, and said the central bank is ready to expand the program. Policy makers continue to weigh the potential benefits of buying longer-term Treasury securities, the statement said. Goldman Sachs fell 1.5 percent to $74.90 in Germany. The company and Deutsche Bank AG cut a total of about 260 jobs in Japan, people familiar with the reductions said. Goldman Sachs’s Tokyo-based spokeswoman, Hiroko Matsumoto, and Deutsche Bank’s local spokesman, Aston Bridgman, both declined to comment. Morgan Stanley Earnings Morgan Stanley slipped 51 cents to $15.62 after posting a wider-than-estimated fourth-quarter loss. The Wall Street that New York-based Morgan Stanley and Goldman Sachs dominated for decades vanished in September, when Lehman Brothers Holdings Inc. went bankrupt and Merrill Lynch & Co. sold itself to Bank of America Corp. Goldman Sachs and Morgan Stanley became banks and took $10 billion each from the U.S. government. IBM, the world’s largest provider of computer services, dropped 2.4 percent to $84.30 in German trading. Adobe, Nike Adobe Systems Inc. jumped 9.4 percent to $24.41. The world’s biggest maker of graphic-design programs said it earned 60 cents a share, excluding some items, in the fourth quarter. That beat the 57-cent average estimate in a Bloomberg survey of analysts. Hovnanian Enterprises Inc. may decline. New Jersey’s largest homebuilder reported its ninth consecutive quarterly loss as potential buyers were stymied by a shrinking number of home loans. The loss was $5.79 a share, wider than the average estimated deficit of $1.72 by analysts in a Bloomberg survey. Nike Inc. added 1.4 percent to $50.32. The world’s largest athletic-shoe maker is due to report second-quarter earnings today. The median analyst estimate in a Bloomberg survey calls for per-share profit of 77 cents excluding items. Apple Inc., maker of the iPhone, dropped 2 percent to $93.52. Chief Executive Officer Steve Jobs won’t deliver the keynote at Macworld Expo next month, raising questions about the company’s pipeline of new products and Jobs’s role as their most visible salesman. To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net.

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