U.S. stock futures extended losses after an industry report showed companies cut more jobs than economists estimated in December, spurring concern that the recession is deepening. Alcoa Inc., Citigroup Inc. and Hewlett-Packard Co. led declines in Dow Jones Industrial Average stocks trading in Europe after ADP Employer Services said payrolls shrank by 693,000 jobs last month, the most since records began in 2001. Goldman Sachs Group Inc. and Morgan Stanley slid as Oppenheimer & Co. analyst Meredith Whitney predicted banks will need to raise more capital this year. “This is an eye-poppingly bad number,” Art Hogan, the New York-based chief market analyst at Jefferies & Co., said of the ADP report. “The economy is in very difficult shape and that’s been proved out over the economic data from the past month.” Futures on the S&P 500 expiring in March lost 1.3 percent to 918.2 at 8:43 a.m. in New York. Dow futures slid 107 points, or 1.2 percent, to 8,843. Europe’s Stoxx 600 lost 0.9 percent, while the MSCI Asia Pacific Index rose 1.5 percent. Alcoa sank 5.7 percent to $11.43 in trading before the official open of U.S. exchanges. The aluminum producer said it will cut capital expenditure in half this year and reduce its global headcount by 13,500, about 13 percent of its workforce, while trimming production by 135,000 metric tons. Alcoa is trying to pare costs as the global recession lowers demand for the lightweight metal used in cars, planes, home appliances and power grids. The price of aluminum fell 36 percent last year as inventories more than doubled to a 14-year high. Morgan Stanley, Goldman Sachs Morgan Stanley dropped 2.4 percent to $19.11. Goldman Sachs retreated 1.5 percent to $87.39. U.S. banks will need to raise additional capital in 2009 after downgrades of mortgage-backed securities surged in the fourth quarter, Whitney said in a note to clients yesterday. Rating cuts accelerated last year, with about $2.3 trillion of securities in the fourth quarter alone, Whitney said. U.S. bank earnings this year will be hurt by as much as $40 billion of further writedowns and credit-rating cuts, she said. Profits at companies in the S&P 500 may decline 11 percent in the first quarter and 6.2 percent in the following three months, according to analyst estimates compiled by Bloomberg. Polycom Inc. rallied 12 percent to $15.60. The maker of video-conferencing systems said profit excluding some items was at least 39 cents a share in the fourth quarter, beating the 35 cents average estimate in a Bloomberg survey of analysts.

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