April 19 (Bloomberg) -- U.S. stock futures fell, indicating benchmark indexes may extend losses following their biggest one- day drop Since February, as European probes of Goldman Sachs Group Inc. fueled concern bank earnings will be hurt by a crackdown on trading practices.
Goldman Sachs, Bank of America Corp. and Moran Stanley fell at least 1.3 percent. Citigroup Inc. fluctuated after posting better-than-estimated results on lower costs for bad loans. Alcoa Inc., the largest U.S. aluminum producer, and Exxon Mobil Corp. dropped with lower metal and oil prices. Halliburton Co. fell 1.2 percent after saying first-quarter profit declined.
Futures on the S&P 500 expiring in June slipped 0.5 percent to 1,183.8 as of 8:36 a.m. in New York. Dow Jones Industrial Average futures decreased 0.5 percent to 10,934 and Nasdaq 100 Index futures dropped 0.3 percent to 2,003.75. Stocks in Europe and Asia also fell.
Goldman Sachs, the most profitable firm in Wall Street history, faces a regulatory probe in Britain and scrutiny from the German government after the U.S. Securities and Exchange Commission sued the firm for fraud tied to collateralized debt obligations. The S&P 500 tumbled 1.6 percent on April 16, the most since Feb. 4, after the suit spurred concern fallout from the financial crisis isn't over.
"You get a punch in the gut with these Goldman Sachs issues," said Don Wordell, who oversees the RidgeWorth Mid-Cap Value Equity Fund, which has beaten 97 percent of its peers during the past five years. "It brings investors back to reality. There's a tremendous amount of skepticism."
'Moral Bankruptcy'
Goldman Sachs sank 13 percent on April 16, its biggest plunge in more than a year, after the SEC sued the bank and one of its vice presidents. The regulator said the bank created and sold CDOs tied to subprime mortgages in early 2007, as the U.S. housing market faltered, without disclosing that hedge fund Paulson & Co. helped pick the underlying securities and bet against them. Goldman Sachs said the claims are "completely unfounded." Paulson wasn't accused of wrongdoing. Goldman Sachs shares slipped 1.3 percent at $158.66 in pre-market trading in New York today.
U.K. Prime Minister Gordon Brown yesterday called for the Financial Services Authority to start their own inquiry into Goldman Sachs, saying he was "shocked" at the "moral bankruptcy" indicated in the suit. Germany's financial regulator, Bafin, asked the SEC for details on the suit, a spokesman for Chancellor Angela Merkel said.
Better Earnings
The S&P 500 last week fell 0.2 percent, halting the longest streak of gains in a year. The 1.6 percent retreat in the S&P 500 on April 16 erased gains earlier in the week spurred by better-than-estimated earnings results at companies from Intel Corp. to CSX Corp. and JPMorgan Chase & Co.
Bank of America fell 1.4 percent to $18.15. JPMorgan Chase & Co. lost 0.5 percent to $45.30. Morgan Stanley fell 1.3 percent to $28.79.
The SEC is investigating transactions by Deutsche Bank AG, UBS AG and the former Merrill Lynch in the mortgage-securities market, the New York Post reported, without saying where it got the information.
Citigroup drifted between gains and losses after posting its fourth profit in five quarters, beating analysts' estimates. First-quarter net income of $4.43 billion followed a loss of $7.58 billion in the fourth quarter and a profit of $1.59 billion in the first three months of 2009, New York-based Citigroup said. Adjusted per-share earnings were 14 cents. Analysts in a Bloomberg survey estimated the company would break even.
Alcoa dropped 1.5 percent to $13.70. Freeport-McMoRan Copper & Gold Inc., the world's largest publicly traded copper producer, declined 1.1 percent to $80.30. Copper dropped for a third day to a three-week low amid a slump in industrial metals as China moved to cool its real-estate market. Aluminum, zinc, lead, nickel and tin also fell.
Exxon, the largest energy producer, slipped 0.6 percent to $67.50 as crude oil fell for a third day. ConocoPhillips, the third-biggest U.S. oil producer, dropped 0.5 percent to $55.75.
Halliburton Earnings
Halliburton sank 1.2 percent to $31.25. The world's second- largest oilfield-services provider said first-quarter earnings fell after contracts signed when energy prices were slumping last year narrowed profit margins.
Hasbro Inc. increased 2.5 percent to $40.83 in New York. The world's second-largest toymaker posted a gain in first- quarter profit that beat analysts' estimates, led by growth in games and puzzles. So-called adjusted per-share earnings were 26 cents, compared with the 16-cent average of 13 estimates compiled by Bloomberg.
A report at 10 a.m. New York time may show the economic recovery is gaining momentum. The index of leading indicators, a measure of the outlook over the next three to six months, probably rose 1 percent last month, a 12th consecutive advance, according to the median estimate of economists surveyed by Bloomberg News.
--Editor: Michael P. Regan
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