By Francesca Cinelli Sept. 15 (Bloomberg) -- U.S. stock-index futures declined before reports on industrial production and manufacturing that may provide investors with more evidence about the prospects for the world’s largest economy. Exxon Mobil Corp. lost 0.6 percent as crude oil fell. Morgan Stanley slid 0.8 percent in Germany after being sued by China Development Industrial Bank. Micron Technology Inc. dropped 2.8 percent as Goldman Sachs Group Inc. cut its recommendation on the stock. Futures on the Standard & Poor’s 500 Index expiring in December slipped 0.3 percent to 1,112.30 at 11:15 a.m. in London. Dow Jones Industrial Average futures lost 0.2 percent to 10,437, while Nasdaq-100 Index futures retreated 0.2 percent to 1,919.25. The S&P 500 has rallied 9.6 percent since reaching its lowest level this year on July 2 after a 16 percent selloff since April left the index trading close to the cheapest valuation compared with earnings in more than a year. “The equity market is still cheap, but investors are still afraid of buying,” said Louis de Fels, a Paris-based money manager at Raymond James Asset Management International, which oversees $29 billion worldwide. “Macro concern persists and more good news is needed as half the people think that the economy will be positive and half that it will be negative. We don’t expect a double-dip.” The S&P 500 yesterday slipped 0.1 percent to 1,121.1, snapping four days of gains that saw it erase its loss for the year, as concern that Bank of America Corp. may have to buy back $20 billion in home loans offset a rally by technology companies. Investors have grappled with conflicting reports this year about the strength of the economy amid signs that European governments will struggle to contain their budget deficits and as China moved to cool growth. The S&P 500, which is up 0.5 percent so far this year, remains 7.9 percent below its peak for 2010 on April 23. Manufacturing in the New York region expanded in September, a report due at 8:30 a.m. local time may show. The Federal Reserve Bank of New York’s general economic index rose to 8 this month from 7.1 in August, according to the median estimate in a Bloomberg News survey. Readings greater than zero signal expansion in the so-called Empire State Index that covers New York, northern New Jersey and southern Connecticut. Industrial Production A separate report may show industrial production cooled last month. Production at factories, mines and utilities rose 0.2 percent, according to the survey median of 78 economists. Output jumped 1 percent in July, when automobile production got a boost as fewer factories were closed to retool for new models. The Federal Reserve’s report is due at 9:15 a.m. Exxon Mobil, the largest U.S. energy company, declined 0.6 percent to $60.67 in German trading. Oil fell for a second day as traders bet U.S. crude inventories dropped less than initially forecast and Enbridge Energy Partners LP got permission to restart a ruptured pipeline supplying the U.S. Midwest. Morgan Stanley fell 0.8 percent to $27.31. The New York- based bank was sued by China Development Industrial Bank for fraud to recover losses from an investment tied to residential mortgage-backed securities. The complaint by the Taiwanese bank was made public after markets closed yesterday. Micron Technology dropped 2.8 percent to $7.07. Goldman Sachs downgraded the largest U.S. maker of computer-memory chips to “neutral” from “buy.” Maxim Integrated Products Inc., another maker of computer chips, lost 3.3 percent to $16.28 in Germany as Goldman Sachs cut its rating to “sell” from “neutral.” Illinois Tool Works Inc. climbed 1.6 percent to $47.52 as the maker of Hobart food mixers and Duo-Fast nail guns had its recommendation lifted to “buy” from “hold” at Citigroup. To contact the reporter on this story: Francesca Cinelli in Milan at fcinelli@bloomberg.net.

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