By Alexis Xydias May 24 (Bloomberg) -- U.S. index futures dropped, signaling the Standard & Poor’s 500 Index may pare its rebound at the end of last week, on concern that the turmoil from Europe’s debt crisis has further to run. Exxon Mobil Corp. and Merck & Co. retreated 1.4 percent in Germany, pacing losses among Dow Jones Industrial Average shares in Europe. Wells Fargo & Co. declined in New York after Goldman Sachs Group Inc. cut its recommendation on the bank. Futures on the S&P 500 expiring in June lost 1.2 percent to 1,072.1 as of 11:35 a.m. in London. Dow average futures retreated 0.9 percent to 10,071 and Nasdaq-100 Index futures fell 1.1 percent to 1,799. U.S. stocks rebounded on May 21 from their biggest drop in a year, as investors speculated losses stemming from concern about Europe’s debt crisis may have gone too far. The S&P 500 is still 11 percent lower than its 2010 high in April even as economic reports including U.S. retail sales beat estimates and European governments committed as much as 860 billion euros ($1.1 trillion) to support weak economies. “I don’t think we’re out of the woods yet,” Ted Weisberg, president of Seaport Securities in New York, said in an interview on Bloomberg Television. If gains from May 21 don’t continue, “we have our eyes on the exit and we’re not going to be afraid to walk through.” History of Corrections The S&P 500 has entered a correction, defined as a decline of more than 10 percent from a peak, on average 421 days after the start of 12 bull markets since 1932, according to HSBC Holdings Plc. The selloffs on average took the measure 15 percent lower. The U.S. benchmark gauge has climbed 61 percent since entering its latest bull run on March 9, 2009. Asian stocks gained today on speculation Chinese policy makers will rein in efforts to cool the economy. Europe’s Stoxx Europe 600 Index fell 0.3 percent, extending last week’s 4.6 percent decline. Sales of previously owned homes in the U.S. probably rose in April to the highest level in five months as buyers took advantage of the last weeks of a government tax credit, economists said before a report today. Purchases increased 5.6 percent to a 5.65 million annual rate, according to the median of 56 forecasts in a Bloomberg News survey. Sales would be the highest since November, the month the incentive was first due to expire. The National Association of Realtors’ report is due at 10:00 a.m. in Washington. Exxon, Merck Exxon Mobil, the world’s largest oil company, retreated 1.4 percent to $60.05. Merck, the second-largest U.S. drugmaker, lost 1.4 percent to $31.59 in Germany. Wells Fargo fell 2 percent to $29.50 in early New York trading. The shares were downgraded to “neutral” from “buy” by Goldman Sachs analysts, who said there is “more relative value” in peers. Campbell Soup may say today it earned 51 cents a share in its third quarter, according to the average estimate of analysts polled by Bloomberg. The shares didn’t trade in Europe. Phillips-Van Heusen may also move. The apparel company is due to release first-quarter net income after markets close today. KKR Financial Holdings LLC jumped 6.4 percent to $8.04 after the end of trading May 21. The specialty-finance company was picked by CNBC’s Jim Cramer as a “speculative buy” on its potential dividend yield. The stock is cheap after dropping this month on concern about the debt situation in Europe, Cramer said. To contact the reporter on this story: Alexis Xydias in London at at axydias@bloomberg.net.

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