U.S. Stock-Index Futures Drop as Chinese Growth Slows

By Sarah Jones 

U.S. stock futures declined, indicating the benchmark Standard & Poor’s 500 Index will fall for a second day, after China’s economy grew at a slower pace than economists forecasts.

Freeport-McMoRan Copper & Gold Inc., the world’s largest publicly traded copper producer, and Newmont Mining Corp. tumbled more than 5 percent in early New York trading as commodities slumped to a nine-month low. Sprint Nextel Corp. surged 14 percent after Dish (DISH) Network Corp. offered to buy the company in $25.5 billion deal.

S&P 500 futures expiring in June dropped 0.6 percent to 1,572.6 at 7:21 a.m. in New York. The gauge slipped 0.3 percent on April 12 from an all-time high, trimming its biggest weekly advance since January. Contracts on the Dow Jones Industrial Average fell 60 points, or 0.4 percent, to 14,724 today.

“Expectations were for a slightly stronger performance in China, given recent surveys have been showing growth in credit and a pickup in exports, so it has been a bit of a surprise,” saidHenk Potts, who helps oversee about $282 billion as an equity strategist at Barclays Plc inLondon. “I wouldn’t be surprised if the market were to pull back in the short term given the tremendous rally. Any significant weakness should be seen as an opportunity to increase exposure.”

The S&P GSCI gauge of 24 commodities sank to the lowest level since July as gold tumbled as much as 6.5 percent and silver plunged as much as 11 percent.

China Growth

China’s gross domestic product rose 7.7 in the first quarter from a year earlier, the National Bureau of Statistics said in Beijing today. That compared with the 8 percent median forecast in a Bloomberg survey of economists and 7.9 percent growth in the fourth quarter. Separate reports showed March industrial production rose less than estimated while retail- sales growth matched forecasts.

In the U.S., data today may show manufacturing in the New York region expanded for a third month in April. The Federal Reserve Bank of New York’s general economic index is due at 8:30 a.m. local time.

U.S. stocks rallied last week, sending the S&P 500 up 2.3 percent, amid optimism that global stimulus efforts and corporate earnings growth will continue to power the world’s largest economy.

Profits at S&P 500 companies are forecast to drop 1.4 percent in the first three months of the year, according to analyst estimates compiled by Bloomberg. That would mark the first year-over-year decrease since 2009.

Freeport Falls

Freeport (FCX) dropped 5.5 percent to $30.15 in New York as Citigroup Inc. downgraded the shares to sell from neutral and cut its price estimate by 29 percent to $25. Copper slid as much as 4.3 percent on the London Metal Exchange.

Newmont Mining, the largest U.S. gold producer, retreated 5.1 percent to $34.50 as precious metals also tumbled. Kinross Gold Corp. declined 7.4 percent to $5.85 and Pan American Silver Corp. sank 10 percent to $13.14.

Citigroup Inc. fell 1.7 percent to $44 before the third- biggest U.S. bank reports first-quarter earnings. Goldman Sachs Group Inc. and Bank of America Corp. are also scheduled to post results this week.

Sprint jumped 14 percent to $7.10 after Dish, Charlie Ergen’s satellite-TV company, challenged a bid by Japan’s Softbank Corp. for the third-largest U.S. wireless carrier.

Sprint shareholders would receive $7 a share, consisting of $4.76 in cash and stock representing about 32 percent of the combined company. That means the offer is $17.3 billion cash and $8.2 billion stock. Dish fell 1.9 percent to $36.93 in German trading.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

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