(Corrects story from 8:54 a.m. New York time to fix amount of forecast Citigroup writedown in sixth paragraph.)
Dec. 27 -- U.S. stock-index futures slipped after an analyst predicted Citigroup Inc. will cut its dividend and a government report showed orders for durable goods rose less than forecast last month.
Citigroup, the biggest U.S. bank, may cut its dividend by 40 percent and write down assets more than it has told investors to expect, Goldman Sachs Group Inc. analyst William F. Tanona wrote in a report. Caterpillar Inc., the biggest maker of earthmoving equipment, retreated after orders for durable goods other than transportation fell.
Standard and Poor's 500 Index futures expiring in March fell 5.9 to 1,503.8 at 8:52 a.m. in New York. Dow Jones Industrial Average futures sank 56 to 13,587. Nasdaq-100 Index futures decreased 4.5 to 2,155. Stock indexes extended their losses after an aide said former Pakistani Prime Minister Benazir Bhutto was killed in a suicide bombing.
Orders for U.S. durable goods rose 0.1 percent in November, trailing the average forecast for a gain of 2 percent in a Bloomberg survey of economists. Demand was restrained by a slump in defense procurement and declines in capital equipment.
``The economy is slowing,'' said Michael Nasto, senior trader at U.S. Global Investors Inc., which manages about $6 billion in San Antonio. ``It's one more point for those people who think we might be headed for a recession in the new year.''
Citigroup fell 64 cents to $29.81. Goldman's Tanona said the New York-based bank may write off $18.7 billion in debt securities, up from its Nov. 4 estimate of as much as $11 billion.
SLM Stock
SLM Corp. fell $2.13, or 9.6 percent, to $20. The biggest provider of student loans plans to sell $2.5 billion of stock to raise money for settling contracts to buy back existing shares.
Most U.S. stocks dropped yesterday for the first time in four days as slower sales at Target Corp. and a bigger-than- expected drop in home prices more than offset a rally in energy companies. The S&P 500 has fallen 3.2 percent this quarter, heading for its first decline since the three months ended June 2006. It has risen 5.6 percent this year.
Treasuries rose today on speculation Americans will reduce spending following a rout in the subprime-mortgage market that is leading the Federal Reserve to reduce interest rates. Five-year yields declined 4 basis points to 3.68 percent.
The consumer confidence index probably decreased to 86.5 in December from 87.3 in November, according to the median forecast in a Bloomberg News survey of economists before the New York- based Conference Board reports the figure today at 10 a.m. in New York.
Consumer Spending
Consumer spending accounts for two-thirds of the U.S. economy. The Organization for Economic Co-Operation and Development forecasts U.S. economic growth will slow to 2 percent next year from 2.2 percent in 2007 and 2.9 percent last year.
Home Depot dropped 5 cents to $26.94 in Germany. Dillard's Inc., Macy's Inc. and Home Depot slashed prices the day after Christmas as U.S. retailers attempted to avoid the worst holiday- shopping season since 2002. The International Council of Shopping Centers lowered its November and December sales forecast yesterday.
The 31-member Standard & Poor's 500 Retailing Index dropped 1.2 percent yesterday after Target, the second-largest U.S. discount retailer, forecast that December sales at stores open at least a year may drop 1 percent. That added to evidence that chain stores may post the weakest holiday sales growth in five years.
Cyclical Scenario
Shares of Dillard's and Macy's didn't trade in Europe. Target, Wal-Mart Stores Inc. and most retailers will report same- store sales on Jan. 10.
``The cyclical scenario for 2008 is still uncertain,'' said Bruno Rovelli, chief investment officer at Eurizon Capital Sgr, which manages the equivalent of $162 billion. ``Economic growth and earnings growth will be modest but that's partly been factored in equity prices. Markets will still be volatile for a while as investors need to come to a definite conclusion on how deep the slowdown will be.''
The 0.1 percent increase, the first gain in four months, followed a revised 0.4 percent drop in October that was larger than previously reported, the Commerce Department said today in Washington. Excluding transportation, demand fell 0.7 percent.
Economists forecast durable goods orders would increase 2 percent in November, according to the median of 67 estimates in a Bloomberg News survey. Projections ranged from a drop of 0.2 percent to a gain of 5 percent.
Excluding transportation equipment, orders were projected to rise 0.5 percent, according to the Bloomberg News survey. Forecasts ranged from a decrease of 1.5 percent to an increase of 1.8 percent.
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