U.S. stock futures declined, after the Dow Jones Industrial Average reached a record, as housing starts unexpectedly fell and European markets slumped on further sanctions against Russia. SanDisk Corp. dropped 7.6 percent after posting profit margins and sales forecasts that fell short of some analysts’ estimates. Morgan Stanley and UnitedHealth Group Inc. (UNH) rose after reporting earnings that beat projections. Microsoft Corp. gained 1.7 percent after saying it will eliminate as many as 18,000 jobs, the largest round of cuts in its history. Futures on the Standard & Poor’s 500 Index (SPX) expiring in September fell 0.4 percent to 1,967.3 at 8:37 a.m. in New York. Dow contracts slid 33 points, or 0.2 percent, to 17,024 after the gauge closed at a record yesterday. “U.S. futures are drifting slightly downwards after another day of record-breaking gains,� Richard Hunter, head of equities at Hargreaves Lansdown Plc in London, wrote in an e-mail. “Some slight concerns remain in the background in the form of earlier-than-expected interest rate rises following comments from the Federal Reserve chair, and the implications of the U.S. sanctions on Russia.� The U.S. and EU said more sanctions may follow after the most punitive sanctions so far over the unrest in Ukraine. The Obama administration’s targets include OAO Rosneft (ROSN), Russia’s largest oil company and natural-gas producer OAO Novatek. The leaders of the 28-nation bloc agreed agreed to blacklist companies and halt lending to public-sector projects in Russia. Housing Starts Beginning home construction unexpectedly declined in June to a nine-month low as a record plunge in the South swamped gains in the rest of the U.S. Housing starts fell 9.3 percent to an 893,000 annualized rate from a 985,000 pace in May that was weaker than initially estimated, figures from the Commerce Department showed. The median estimate of 79 economists surveyed by Bloomberg called for a 1.02 million rate. While Federal Reserve Chair Janet Yellen said this week that rates will probably stay low for a “considerable period� after bond purchases end, an unexpectedly fast decline in unemployment has put pressure on Fed officials to consider accelerating their timetable for an interest-rate increase. With the Dow closing at a record and the S&P 500 only 0.2 percent below its all-time high reached this month, financial professionals are growing more anxious. Forty-seven percent of investors, analysts and traders in a Bloomberg Global Poll said the equity market is close to unsustainable levels, while 14 percent already see a bubble. Almost a third of respondents called the market for lower-rated corporate debt overheated and most said stock swings will increase within six months, the July 15-16 poll showed. Earnings Season “You see this always when markets reach new highs, we see profit-taking from our clients because they don’t trust the market,� Markus Wallner, an equity strategist at Commerzbank AG in Frankfurt, said in a phone interview. A total of 24 companies on the S&P 500 report earnings today, including Google Inc. and Schlumberger Ltd. Profit by the gauge’s members increased 4.5 percent in the second quarter, and revenue rose 3.1 percent, according to analysts’ estimates compiled by Bloomberg. SanDisk dropped 7.6 percent. The company, whose stock had rallied 53 percent this year, has held back on increasing production, seeking to avoid a repeat of supply gluts that have caused semiconductor prices to fall below the cost of manufacturing. The chipmaker expects it won’t have enough inventory to meet all orders this quarter, it said. Mattel Inc. slumped 8.4 percent as second-quarter earnings and sales missed analysts’ estimates. Orbitz Worldwide Inc. (OWW) retreated 6.7 percent. The online travel-services company said it is offering 20 million shares of its common stock by an affiliate of Travelport Ltd. Morgan Stanley Morgan Stanley (MS) advanced 1.1 percent. The best-performing stock this year among the five largest Wall Street banks reported profit that beat estimates on a smaller drop in fixed-income trading revenue than analysts projected. UnitedHealth added 0.5 percent. The largest U.S. health insurer by revenue beat analyst earnings estimates as it continued to see sales gains from its technology and consulting unit. Microsoft jumped 1.7 percent on the job cuts as Chief Executive Officer Satya Nadella integrates Nokia Oyj’s handset unit and slims down the software maker. The restructuring, amounting to about 14 percent of its workforce, includes 12,500 factory and professional positions, the world’s biggest software maker said in a statement today. To contact the reporter on this story: Jonathan Morgan in Frankfurt at jmorgan157@bloomberg.net To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net; Lynn Thomasson at lthomasson@bloomberg.net Jeff Sutherland, Will Hadfield

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