U.S. Stock-Index Futures Retreat on Europe Debt




U.S. stock-index futures fell as banks declined amid mounting concern about Europe’s debt crisis, while tensions between North and South Korea escalated.

Goldman Sachs Inc. and JPMorgan Chase & Co. fell more than 1 percent in Germany. Alcoa Inc. dropped 2 percent as base metals declined in London. Del Monte Foods Co. rallied 2.3 percent after a KKR & Co.-led group agreed to acquire the company in a $4 billion transaction. Wal-Mart Inc. rose as Black Friday, the biggest shopping day of the year, gets underway.

Futures on the Standard & Poor’s 500 Index expiring in December dropped 1 percent to 1,184.2 at 11:47 a.m. in London, indicating benchmark indexes may fall as markets reopen for half a day following the Thanksgiving holiday. Dow Jones Industrial Average futures lost 0.8 percent to 11,061 and Nasdaq-100 Index futures dropped 1 percent to 2,137.

“We are going to be saddled with European debt concerns for a while and it seems to be an issue that markets are completely obsessed with,” said London-based Mike Lenhoff, chief strategist at Brewin Dolphin Securities Ltd., which oversees about $33 billion. “In addition to which, the two Koreas have everyone on alert. If the market chooses to focus on the negatives, then there is no shortage of things to focus on.”

The S&P 500 has fallen 2.2 percent since reaching a two- year high of 1,225.85 on Nov. 5 amid concern the sovereign-debt crisis will spread to southern Europe and speculation China will raise interest rates to tame inflation. Stocks extended losses on Nov. 23 after North Korea shelled a South Korean island.

Spain, Portugal

The cost of insuring Portuguese and Spanish government debt against default climbed to record levels based on closing prices, according to data provider CMA. Portugal today faces a final vote in parliament on its 2011 spending plan, which includes measures to pare the deficit.

The Financial Times Deutschland reported that euro-area policy makers are pushing Portugal to tap a 750 billion-euro ($993 billion) bailout fund. Portuguese Finance Minister Fernando Teixeira dos Santos said European Union governments can’t impose a bailout on his country even as speculation mounts that Portugal will eventually have to ask for one.

Shares of Goldman Sachs fell 1.5 percent to $157.91 in Germany, JPMorgan Chase & Co. lost 1.3 percent to $37.68 and Bank of America Corp. slid 1.2 percent to $11.15.

Alcoa lost 2.7 percent to $12.95 in German trading as base metals declined in London. North Korea is “ready to give a shower of dreadful fire and blow up the bulwark of the enemies,” according to a statement from state news agency KCNA. “Escalated confrontation would lead to a war.”

The dollar hit a seven-week high against the yen on concerns the conflict in the Korean peninsula could worsen, raising the demand for relatively safe assets.

Curb Speculation

Separately, the Shanghai Futures Exchange, where the world’s top three metals contracts are traded, said yesterday it will increase margins and daily price-move limits in the latest move by China to curb speculation and cool inflation. Chinese stocks fell for the first time in three days as the Shanghai Securities News said the government may cut the target for new lending next year.

Del Monte rallied 3.2 percent to $18.57 in Germany after the company yesterday said KKR, Vestar Capital Partners and Centerview Partners will pay $19 a share in cash for the maker of canned fruit and pet foods. That would be 21 percent higher than the closing price on Nov. 18, the day before takeover talks were reported. The buyers will assume about $1.3 billion in net debt.

Wal-Mart rose 0.3 percent to $54.17 in Germany as Black Friday a bellwether for the entire holiday season, gets underway. Shares of Home Depot Inc., Saks Inc. and Macy’s Inc. were yet to trade in Europe.

Analysts’ estimates for holiday sales vary from little changed to increases of as much as 4.5 percent. The retail federation predicts a gain of 2.3 percent to $447.1 billion after an uptick of 0.4 percent last year and a 3.9 percent drop in 2008.