U.S. stock futures gained, signaling the Standard & Poor’s 500 Index may trim its worst yearly loss since 1931, after initial jobless claims decreased more than forecast.
Home Depot Inc., Gap Inc. and United Airlines parent UAL Corp. climbed as the number of Americans filing for first-time unemployment benefits dropped by 94,000 last week. Stocks in Europe and Asia climbed, paring the biggest annual declines on record for MSCI’s regional indexes.
S&P 500 futures rose 2.9, or 0.3 percent, to 891.1 at 8:53 a.m. in New York. Dow Jones Industrial Average futures added 0.2 percent to 8,657 and Nasdaq-100 index futures were unchanged at 1,206.
The S&P 500 has slumped 39 percent in 2008 as more than $1 trillion in credit-related losses at financial companies dragged the U.S., Europe and Japan into the first simultaneous recessions since World War II. At its lowest closing level of 2008 on Nov. 20, the S&P 500 was down 49 percent for the year and 52 percent from its Oct. 9, 2007, record of 1,565.15.
The S&P 500 has risen 18 percent since its 11-year low on Nov. 20. The rebound came as the government rescued New York- based Citigroup Inc., President-elect Barack Obama pledged to stimulate growth with spending on infrastructure projects and the Federal Reserve cut interest rates to as low as zero to combat the worst financial crisis in seven decades.
China’s CSI 300 Index fell for an eighth straight day, capping the gauge’s first annual decline since it was introduced in April 2005. The index tracking yuan-denominated A shares lost 66 percent in 2008 as economic growth cooled and exports shrank.
BRICs Slump
Stock measures in the other three so-called BRIC nations -- Brazil, Russia and India -- all lost more than 41 percent this year as the global economic slowdown reduced demand for commodities and investors shunned riskier assets.
Financial companies fell the most among the 10 main industries in the S&P 500 this year, falling 59 percent collectively for the worst drop in the 19-year history of the index tracking the group. The retreat was driven by global banks racking up asset writedowns and credit losses stemming from the 2007 collapse of the subprime mortgage market.
Lehman Brothers Holdings Inc., once the nation’s fourth- biggest securities firm, filed a record U.S. bankruptcy in September after its shares lost almost all their value. Merrill Lynch & Co. and Bear Stearns Cos., Lehman’s rivals, were forced into emergency takeovers to avoid collapse, while Goldman Sachs Group Inc. and Morgan Stanley converted to bank holding companies as investors lost confidence in firms that depend on debt-market financing. Morgan Stanley shares slid 71 percent in 2008, while Goldman Sachs fell 62 percent.
2008 Declines
Insurers crippled by losses on investments and contracts protecting against debt defaults were among the biggest losers. American International Group Inc., the world’s largest insurer before it was placed under government conservatorship, lost 97 percent.
Automakers slumped as the slowing economy pushed General Motors Corp. to the brink of bankruptcy, sending the nation’s largest automaker down 85 percent. Its U.S. sales tumbled 22 percent during the first 11 months of the year, which GM blamed in part on buyers’ dwindling access to credit.
Companies that sell discounted goods posted the biggest gains as consumers reined in spending as the yearlong recession deepened. Family Dollar Stores Inc. jumped 33 percent for the biggest advance in the S&P 500 in 2008. Wal-Mart Stores Inc., the world’s largest retailer, climbed 16 percent and fast-food chain McDonald’s Corp. increased 4.8 percent for the only gains in the 30-stock Dow average.
Profit Slump
Corporate profits have declined seven straight quarters, according to the U.S. Bureau of Economic Analysis. Should earnings fall through the first half of 2009, as analysts surveyed by Bloomberg project, that would be the longest stretch of decreases since the government started tracking quarterly data in 1947.
The S&P 500’s decline in 2008 was the first that exceeded 30 percent since the 39 percent plunge in 1937. It lost 23 percent in 2002 and 29.7 percent in 1974, which were followed by annual gains of 26 percent and 32 percent, respectively.
All 11 investment strategists surveyed by Bloomberg expect the S&P 500 to rise next year. The forecasts range from 874 at Barclays Plc to 1,300 at UBS AG, and the average is 1,056.
