U.S. stock futures fell, signaling that the Standard & Poor’s 500 Index may decline for a fourth week, as concern increased that the global economy is weakening. Bank of America, the biggest U.S. lender, retreated 2.3 percent and JPMorgan Chase & Co. (JPM) dropped 1.7 percent in early New York trading. Financial shares in the S&P 500 sank 5 percent yesterday. Hewlett-Packard Co. (HPQ) tumbled 12 percent after agreeing to buy Autonomy Corp. for $10.3 billion. S&P 500 futures expiring in September dropped 1.5 percent to 1,126.3 at 7:35 a.m. in New York after earlier slumping as much as 2.3 percent. The U.S. equity benchmark lost 4.5 percent yesterday, its biggest decline since Aug. 8. Dow Jones Industrial Average futures retreated 162 points, or 1.5 percent to 10,855 today. “We have a fear-based, emotional-based market right now,” said Erik Ogard, director of multi-strategy investments at Russell Investments, which oversees $163.4 billion, in an interview with Susan Li on Bloomberg Television’s “First Up.” “There are real economic things to be worried about. However, it’s the degree of the reaction that we think might just be a little overdone.” Growth Forecasts Cut Citigroup Inc. cut its growth forecasts for the world’s largest economy. The U.S. economy may expand less than previously forecast in 2011 and 2012 because of potential “political paralysis” and fiscal-tightening measures, Citigroup analysts wrote in a report dated yesterday. The brokerage cut its 2011 gross domestic product growth forecast to 1.6 percent from 1.7 percent and lowered its 2012 GDP growth estimate to 2.1 percent from 2.7 percent. Reports yesterday showed that American jobless claims rose more than estimated and a measure of manufacturing in the Philadelphia region unexpectedly contracted in August. The S&P 500 has tumbled 3.2 percent this week as concern mounted that the global economy is faltering and as investors speculated that European banks lack sufficient capital. The gauge has slumped 16 percent from its April 29 high, matching the retreat between April 23 and July 2, 2010, previously the biggest contraction of the bull market that began in March 2009. The Dow lost more than 400 points yesterday for the fourth time this month. “The concern has always been about this whole debt and sovereign overhang to the point that you think, ‘How long should I continue to hold the stock?’,” Manish Singh, head of investment at Crossbridge Capital, which has about $2 billion under management, said in a telephone interview from London. “There’s no clarity coming from Europe. What the market wants is clarity.” Bank Shares Fall Bank of America, the biggest U.S. lender, dropped 2.3 percent to $6.85 in early New York trading. JPMorgan, the second-largest U.S. bank, declined 1.7 percent to $34.60. Goldman Sachs Group Inc. slid 2 percent to $110.86 in German trading. Bank of America Chief Executive Officer Brian T. Moynihan told his managers to expect 3,500 job cuts this quarter. Moynihan has come under pressure to reduce outlays at the bank, which has lost almost half its market value this year, as costs tied to the 2008 takeover of subprime lender Countrywide Financial Corp. mount and revenue shrinks amid signs of a U.S. slowdown. Hewlett-Packard slumped 12 percent to $25.93 in early New York trading after the world’s largest computer maker agreed to buy software company Autonomy Corp. for $10.3 billion. Hewlett- Packard also cut its fiscal fourth-quarter and full-year profit forecasts. Sprint Nextel Corp. (S) fell 1.7 percent to $3.43 in Germany. The Overland Park, Kansas-based company has talked to cable companies about a possible investment that may lead to the acquisition of Clearwire Corp., three people familiar with the discussions said. To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net; Cecile Vannucci in Amsterdam at cvannucci1@bloomberg.net To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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