U.S. index futures declined after Alcoa Inc.’s earnings missed analyst estimates, while oil snapped a five-day rally and South Korea’s won depreciated as progress to stem Europe’s debt crisis slowed. Standard & Poor’s 500 Index futures slipped 0.3 percent at 12:56 p.m. in Tokyo. Oil dropped 0.7 percent in New York. The euro fell 0.2 percent to $1.3617 and the won weakened for the first time in four days. The yuan slid 0.3 percent in Shanghai even after the U.S. Senate passed a bill designed to punish China for an undervalued currency. The MSCI Asia Pacific Index dipped 0.1 percent, paring losses of as much as 1.3 percent. The Shanghai Composite Index jumped 2.2 percent, led by banks. Alcoa was the first Dow Jones Industrial Average company to report results for a quarter that’s forecast to show the slowest profit growth in the U.S. since the end of 2009. The euro fell after Slovakia, the only country that hasn’t ratified a revised European bailout fund, headed for a second vote after failing to approve the package yesterday. The U.S. Senate voted 63-35 for a measure that would allow sanctions on countries with misaligned exchange rates, a proposal that China called “protectionism”. “We’re watching corporate earnings reports to gauge the impact of the global economic slowdown on profitability,” said Han Sang Soo, a fund manager at Samsung Asset Management Co. in Seoul, which oversees about $28 billion in assets. “The development in Slovakia was just another reminder that the process to resolve Europe’s debt trouble isn’t easy.” Alcoa’s Earnings Futures signal the S&P 500 may halt a two-day gain. Alcoa fell 5.3 percent in extended trading after the company said profit excluding some costs was 14 cents a share last quarter. That trailed the 22 cents forecast by analysts surveyed by Bloomberg. Earnings per share for the S&P 500, excluding financial companies, are forecast to have gained 14 percent last quarter, analysts’ estimates compiled by Bloomberg show. PepsiCo Inc., the world’s largest snack-foods maker, is scheduled to release earnings later today and JPMorgan Chase & Co. and Google Inc. will report tomorrow, according to data compiled by Bloomberg. Companies will be guiding “for a lot of uncertainty and markets have had plenty of that and we’ll probably get another dose of it,” Bob Doll, chief equity strategist at Blackrock Inc., which manages $3.6 trillion, said in a Bloomberg Television interview from Princeton, New Jersey. The European crisis “is still out there” and “until we have some understanding that we can hold it all together, we’re not out of the woods,” he said. Euro, Won The euro depreciated 0.1 percent to 104.43 yen. Slovakia’s opposition leader said lawmakers must find a way to approve Europe’s enhanced bailout fund, which was rejected yesterday amid a dispute over the future of Prime Minister Iveta Radicova. The won weakened 0.7 percent to 1,172.8 per dollar. South Korea is likely to refrain from raising interest rates again tomorrow, increasing the odds that the yield curve will invert with long-term bond rates dropping below those of shorter maturities, according to Dongbu Securities Co. The People’s Bank of China set the yuan’s daily reference rate 0.2 percent weaker at 6.3598 per dollar today. The currency touched 6.3916 per dollar in Shanghai. The U.S. proposal is “a serious violation of World Trade Organization rules, and won’t be able to resolve America’s own economic and employment problems,” Ma Zhaoxu, a spokesman for China’s foreign ministry, said in a statement on the ministry’s website today. Bond Risk The cost of insuring Asia-Pacific corporate and sovereign bonds against non-payment increased, with the Markit iTraxx Japan index jumping 10 basis points to 204.5 basis points, Citigroup Inc. prices show. A close of 204.5 would be the highest since Oct. 7, according to data provider CMA. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan rose three basis points to 223, Royal Bank of Scotland Group Plc prices show. The Markit iTraxx Australia index increased two basis points to 204, Westpac Banking Corp. prices show. Both indexes are set for the highest levels since Oct. 10, according to CMA prices. About five shares rose for every four that fell on MSCI’s Asia Pacific Index, which was little changed after a four-day, 7.8 percent rally. Japan’s Nikkei 225 Stock Average slipped 0.2 percent, Australia’s S&P/ASX 200 Index dropped 0.6 percent, while Hong Kong’s Hang Seng Index gained 0.6 percent. Industrial & Commercial Bank of China (601398) Ltd., the world’s largest lender by market value, added 1.5 percent in Shanghai and China Construction Bank Corp. advanced 2 percent. The stocks rose yesterday after Central Huijin Investment Ltd., a Chinese state investment fund, said it bought shares in the nation’s four largest lenders. Honda, Fletcher Honda Motor Co., Japan’s second-largest automaker by revenue, retreated 2.6 percent after saying flooding in Thailand may hurt production. Fletcher Building Ltd. (FBU) tumbled 12 percent after New Zealand’s largest construction company said first-half profit may fall 10 percent. Copper for three-month delivery on the London Metal Exchange erased declines of as much as 1.7 percent and climbed 0.8 percent to $7,349. The metal slipped 2.7 percent yesterday, the most since Sept. 30, on concern slowing economic growth in China and the deepening European debt crisis will curb metals demand. Rubber for March delivery slumped as much as 2.5 percent to 311.60 yen a kilogram on the Tokyo Commodity Exchange as falling oil prices reduced the appeal of the commodity used to make tires. Crude dropped as much as 1.5 percent to $84.52 a barrel on the New York Mercantile Exchange, snapping a five-day rally that was the longest run of gains this year. December delivery corn climbed as much as 1.2 percent to $6.525 a bushel before trading at $6.485. The price jumped 6.6 percent yesterday, the most since June 2010. Wheat and soybeans declined after increasing 8.1 percent and 4.9 percent respectively yesterday, on signs of increased demand from the U.S., the biggest shipper. Mexico, the largest corn importer after Japan, bought 261,200 metric tons from U.S. exporters, the government said. To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Saeromi Shin in Seoul at sshin15@bloomberg.net To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

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