U.S. stock futures retreated, indicating the Standard & Poor’s 500 Index will decline for a third straight day, as manufacturing contracted in Europe and China and FedEx Corp. (FDX) tumbled amid a disappointing forecast. FedEx slumped 2.4 percent after forecasting a profit range for its current fiscal quarter whose low end trailed estimates amid slowing express-shipment demand at the world’s largest cargo airline. Cliffs Natural Resources Inc. (CLF) and Freeport- McMoRan Copper & Gold Inc. dropped at least 1.5 percent. Caterpillar Inc. (CAT), the biggest maker of construction and mining equipment, slid 1.3 percent. Morgan Stanley (MS) and Citigroup Inc. (C) fell more than 1.1 percent to pace losses in financial shares. S&P 500 futures expiring in June lost 0.6 percent to 1,389.60 at 9:20 a.m. New York time. Dow Jones Industrial Average futures fell 59 points, or 0.5 percent, to 13,007. “Most people recognize that China growth has slowed,� said Mark Bronzo, who helps manage about $125 billion at Guggenheim Investments, in Irvington, New York. “It’s a question of: is it going to be a sharp or a mild slowdown? The data in Europe shouldn’t be a big surprise to anyone. Yet there’s enough of a reason there after the sharp run-up in stocks for the market to pull back or go sideways in the short term.� Equity futures joined a global slump as data showed that euro-area services and manufacturing output contracted more than economists forecast in March. A Chinese manufacturing index indicated a worse contraction this month, bolstering the case for Premier Wen Jiabao to add measures to sustain growth even as he prolongs a campaign to cool property prices. Jobless Claims Future contracts fell even after data showed that applications for unemployment benefits dropped last week to the lowest level in four years, reinforcing signs the U.S. labor market is picking up. Jobless claims decreased by 5,000 to 348,000 in the week ended March 17, the fewest since February 2008. The median forecast of 46 economists in a Bloomberg News survey projected 350,000. The S&P 500 is still poised for a fourth straight month of gains, the longest winning streak since September 2009. (SPX) The index has risen 2.7 percent in March, extending its year-to-date advance to 12 percent, amid economic and corporate data that exceeded projections. The benchmark gauge is also headed for the best first quarter since 1998. FedEx slumped 2.4 percent to $93.56. Earnings in the three months ending in May, FedEx’s fourth quarter, will be $1.75 to $2 a share, compared with $1.75 a year earlier, the Memphis, Tennessee-based company said. Analysts estimated $1.98, the average of 22 projections compiled by Bloomberg. Small Packages FedEx’s Express unit, its largest by revenue, posted a 4 percent drop in domestic shipments while international priority shipments of small packages slid 1 percent. Executives said on a conference call the company projects slower growth in coming quarters. The range of goods delivered by FedEx and United Parcel Service Inc. (UPS) makes them economic barometers. Energy and raw material shares retreated as commodities declined amid concern about slower demand. Cliffs Natural, the largest U.S. iron-ore producer, slumped 2 percent to $69.65. Freeport-McMoRan, the world’s largest publicly traded copper producer, declined 1.5 percent to $39.20. Industrial companies also fell as Caterpillar dropped 1.3 percent to $107.61. Financial companies slid. Morgan Stanley declined 1.3 percent to $19.80. Citigroup slipped 1.1 percent to $37.38. To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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