By Stephen Kirkland July 12 (Bloomberg) -- U.S. stock futures fell, indicating the Standard & Poor’s 500 Index may snap a four-day rally, while a third month of declining Chinese imports drove down copper. The euro weakened and Treasuries rose. Futures on the S&P 500 lost 0.5 percent at 11:29 a.m. in London. The MSCI World Index of stocks in 24 developed nations slumped 0.3 percent. Copper, aluminum and oil retreated. The euro depreciated 0.6 percent against the dollar. The yield on the 10-year Treasury slipped three basis points, and the Japanese 10-year yield slid four basis points. China’s iron ore and copper imports dropped last month from May, the third straight decrease, damping the outlook for demand from the world’s fastest-growing major economy. European finance ministers are meeting today in Brussels to debate how much of the detail of stress tests on banks to disclose before releasing results by the end of July. Stocks fluctuated in Europe before the start of the U.S. second-quarter earnings season. “The earnings season is likely to herald mixed results, prospects for robust corporate earnings are good, those for financial-sector earnings less so,” Michael Hart, a currency strategist at Citigroup Inc. in London, wrote in a report. “The European bank stress tests hang over the market like a Damocles’ sword, but even the scheduled publication on July 23rd is unlikely to bring either relief or resolution.” Alcoa, Qualcomm The decline in U.S. futures indicated the S&P 500 may pare some of last week’s rally, the biggest in a year. Alcoa Inc., the largest U.S. aluminum producer, was little changed in German trading before it reports results after the close in New York today. Companies in the S&P 500 are projected to post profit gains of 34 percent, according to analysts’ estimates compiled by Bloomberg. Qualcomm Inc., the largest phone-chip producer, rose 0.6 percent in Europe after Goldman Sachs Group Inc. added the stock to its “conviction buy” list on accelerating smartphone growth. The Stoxx Europe 600 Index slipped 0.2 percent, following four days of gains. The MSCI Asia Pacific Index dropped for the first time in three days, losing 0.1 percent. Kontron AG sank 17 percent in Frankfurt after the maker of miniature computers for slot machines and drone aircraft said it’s setting aside 34 million euros ($43 million) for outstanding debts. Zodiac Aerospace SA advanced 4.7 percent in Paris after rejecting a takeover approach from Safran SA. Mitsubishi UFJ Financial Group Inc., Japan’s biggest bank by market value, dropped 2.1 percent in Tokyo. BP, Exxon “Investors are taking a bit of profit from the gains made over the past few days,” said Marco Bider, who helps manage about $8 billion at Banque CIC in Basel. “Many will be waiting to see how second-quarter figures look before making big moves.” BP Plc, battling to contain the biggest oil spill in U.S. history, rose 6.7 percent in London after the Sunday Times said Exxon Mobil Corp. may bid for the company and reports that it’s selling assets in Alaska. The cost of insuring BP’s debt fell, with credit-default swaps on the company dropping 35.5 basis points to 335.5, the lowest since June 8, according to CMA DataVision. BP is working to install a new, tighter-fitting cap over its leaking well in the Gulf of Mexico, Senior Vice President Kent Wells said yesterday. Crude oil for August delivery declined 0.7 percent to $75.55 a barrel on the New York Mercantile Exchange. Copper for delivery in three months lost 1.5 percent to $6,660 a metric ton on the London Metal Exchange. Aluminum slid 1 percent to $1,985 a ton. The euro weakened to $1.2563, falling against 13 of its 16 most-traded peers. The yen was little changed at 88.58 per dollar. Treasuries The 10-year Treasury yield dropped to 3.03 percent. The U.S. plans to auction $35 billion of three-year notes today, the first of three sales this week totaling $69 billion. The yield on the Japanese 10-year note fell to 1.13 percent after the country’s ruling party was defeated in elections to the upper house of parliament. The MSCI Emerging Markets Index rose 0.1 percent, advancing for a third day. Developers and banks led gains in China on speculation the government will relax curbs on mortgage lending after property-price gains slowed. The Shanghai Composite Index jumped 0.8 percent. --With assistance from Adam Ewing in Stockholm and Paul Armstrong, Claudia Carpenter, David Merritt and Daniel Tilles in London. Editors: Stephen Kirkland, Justin Carrigan To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net To contact the editor responsible for this story: Paul Sillitoe in London at psillitoe@bloomberg.net

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