U.S. Stock-Index Futures Drop; Capital One, Citigroup Decline

(Bloomberg) -- U.S. stock-index futures fell after Capital One Financial Corp. said profit last year missed its projection because of bad loans and Goldman Sachs Group Inc. analysts reduced their share-price estimates for the country's biggest banks and brokerages.

Capital One, the largest independent U.S. credit-card issuer, dropped after saying 2007 profit missed its October projection by about 20 percent. Citigroup Inc., Morgan Stanley and Merrill Lynch & Co. slipped after Goldman predicted a U.S. recession this year will hurt earnings at financial companies. Exxon Mobil Corp., the nation's largest energy company, declined as oil retreated for the fifth time in six days.

Standard and Poor's 500 Index futures expiring in March lost 5.8 to 1,405.8 as of 9:06 a.m. in New York. Dow Jones Industrial Average futures decreased 40 to 12,705. Nasdaq-100 Index futures fell 13 to 1,954.5.

``The worry is that current earnings estimates are far too optimistic and need to be cut aggressively,'' said Chirin Gill, who helps manage the equivalent of $3 billion at Daiwa SB Investments in London.

Fourth-quarter profit at S&P 500 companies probably fell 8.1 percent from a year ago, the biggest drop since 2001, according to analysts' estimates compiled by Bloomberg. Earnings at financial companies probably declined 63 percent, the only drop among 10 industries.

U.S. stocks gained the most in two weeks yesterday after Warren Buffett's Berkshire Hathaway Inc. said it may invest in municipal bond insurers and Hewlett-Packard Co. predicted earnings will withstand an economic slowdown.

 

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