April 27 (Bloomberg) -- U.S. stock futures fell, indicating the Standard & Poor's 500 Index may drop for a second day, as growing concern Europe's debt crisis is spreading overshadowed better-than-estimated earnings. Alcoa Inc. and International Business Machines Corp. fell as Greek and Portuguese bond yields soared on concern the countries will default. Boston Scientific Corp. dropped 4 percent after writing off $1.8 billion in costs related to a recall of its implantable heart defibrillators. Goldman Sachs Group Inc., Wall Street's most profitable firm, slipped 1.2 percent before a U.S. Senate hearing on its business practices. Futures on the S&P 500 expiring in June dropped 0.6 percent to 1,201.5 at 9:11 a.m. in New York. Better-than-estimated earnings at 3M Co. and DuPont Co. limited declines in Dow Jones Industrial Average futures, which lost 0.2 percent to 11,130. Nasdaq-100 Index futures fell 0.4 percent to 2,038. "There's a contagion risk around," said Markus Steinbeis, Unterfoehring, Germany-based head of equity portfolio management at the German unit of Pioneer Investments, which oversees about $221 billion globally. "The sovereign risk scenario will still be present in the months to come. We're not facing a good investment horizon and in the longer term it could be a big problem for the equity market." The S&P 500 fell from a 19-month high yesterday as concern that financial reform legislation will curb bank profits overshadowed improving earnings at Caterpillar Inc. and Whirlpool Corp. The main benchmark for American equities is up 79 percent from a 12-year low in 2009 after falling as much as 57 percent from a record in October 2007 amid a global recession intensified by the collapse of the U.S. real estate market. Greece Concern Greek two-year notes fell for the eighth straight day, sending the yield above 15 percent, the highest level since at least 1998. Germany's Chancellor Angela Merkel said Greece must provide a program for cutting its budget deficit before getting an EU-led bailout package. Portuguese spreads, the extra yield that investors demand to hold its debt rather than German equivalents, jumped to 260 basis points today, the most since at least 1997. Home prices in 20 U.S. cities rose less than forecast in February from a year earlier, a sign a housing recovery will take time to develop. The S&P/Case-Shiller home-price index of property values in 20 cities increased 0.6 percent from February 2009, the first gain since December 2006, the group said today in New York. The median forecast of economists surveyed by Bloomberg News projected a 1.3 percent advance. Alcoa, the largest U.S. aluminum maker, fell 0.6 percent to $13.97. IBM, the world's largest computer-services provider, retreated 0.7 percent to $129.75. Earnings Watch 3M Co. rose 4.1 percent to $91.01. The maker of 55,000 products from dental implants to Post-It Notes topped analysts' estimates for first-quarter profit as sales rose at least 12 percent in each of its main units. DuPont climbed 2.6 percent to $42 after first-quarter profit more than doubled on sales of genetically modified seeds and electronics materials and automotive paint. Goldman Sachs slipped 1.2 percent to $150.23 before the Senate's Permanent Subcommittee on Investigations, due to begin at 10 a.m. in Washington. Carl Levin, a Michigan Democrat who leads the subcommittee, released documents that he said showed the company "put its own interest and profit ahead of the interests of its clients," a conflict he called on Congress to end. Lloyd Blankfein, Goldman Sachs's chairman and chief executive officer, will dispute that assertion and argue the firm was merely managing its own risk. Proprietary Trading The Senate is debating financial reform legislation that could prevent banks from trading for their own accounts and require them to separate derivatives businesses from regulated depository subsidiaries. Goldman Sachs Chief Financial Officer David Viniar estimated in January that approximately 10 percent of the company's revenue derives from trading that has no connection with customer business. Boston Scientific fell 4 percent to $6.78. The company lowered its sales and earnings forecasts for 2010. Oil producers declined. Crude fell before a report forecast to show that U.S. supplies increased last week amid weak demand. Schlumberger Ltd., the world's largest oilfield contractor, dropped 0.5 percent to $72.32. Exxon Mobil Corp., the world's second-largest corporation, fell 0.3 percent to $69.05. Freeport-McMoRan Copper & Gold Inc., the world's largest publicly traded copper producer, dropped 1.3 percent to $79.35. An increase in the value of the dollar also hurt prices for oil and metals denominated in the U.S. currency. Lexmark Slides Lexmark International Inc. gained 3.9 percent to $41.50. The second-largest U.S. printer maker forecast second-quarter profit of 85 cents to 95 cents a share, excluding some items, compared with the 73-cent average of estimates compiled by Bloomberg. More than 80 percent of S&P 500 companies to have posted first-quarter earnings have topped analysts' projections, according to data compiled by Bloomberg. Profit estimates for companies in the index rose 9.1 percent on average in April, twice the gain in prices and the largest monthly increase since at least 2006, Bloomberg data show. --With assistance from Julie Cruz in Frankfurt. Editor: Michael P. Regan.

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