U.S. Stock-Index Futures Decline; Intel, Citigroup Shares Drop

U.S. stock-index futures fell after Intel Corp. said lower chip prices will hurt earnings and a Merrill Lynch & Co. analyst predicted Citigroup Inc. may report $18 billion in first-quarter credit writedowns.

Intel, the world's largest computer-chip maker, dropped after cutting its profitability forecast because of an industry glut of flash-memory. Citigroup retreated on Merrill's forecast for a first-quarter loss at the biggest U.S. bank. Technology and financial stocks led European shares to a fifth day of declines and Asia's regional benchmark slumped for a fourth day.

Standard & Poor's 500 Index futures expiring this month decreased 8 to 1,323.9 as of 8:31 a.m. in New York. Dow Jones Industrial Average futures lost 61 to 12,191. Nasdaq-100 Index futures fell 9.75 to 1,727.

Intel is an indicator, said Franck Hennin, who helps oversee $6.1 billion at Richelieu Finance in Paris. We have to survey technology stocks today.

Futures indicated the Nasdaq Composite Index and Dow average will fall for a fourth straight day and the S&P 500 will drop for the fourth time in five days. The Nasdaq has retreated 15 percent this year, the biggest decline among the three equity benchmarks, on growing concern that profit growth at Intel, Apple Inc., Google Inc. and other technology companies will slow as $181 billion in credit losses restrain the global economic expansion.

Most U.S. stocks gained yesterday as record oil and gold prices spurred a rally in commodity producers, outweighing declines in technology and financial shares.

Intel, Micron

Intel lost 61 cents to $19.40 today. The company said gross margin, the percentage of sales remaining after deducting the cost of production, will be 54 percent, down from the 56 percent it predicted in January. Intel cited lower-than-expected prices of chips that store data in cameras and music players for the reduced forecast.

Brokerages including Goldman Sachs Group Inc. and UBS AG lowered their earnings estimates for Intel on concern flash- memory chips will undermine its main business of making computer processors.

Google, owner of the most popular Internet search engine, dropped $3.52 to $453.50. Apple, maker of the iPod media player, lost 83 cents to $120.90.

Citigroup declined 59 cents to $22.50. Merrill's Guy Moszkowski said he expects $15 billion of writedowns related to the company's holdings of subprime mortgages and collateralized debt obligations and another $3 billion from leveraged loans, bad consumer debt, real-estate lending and other investments.

Citigroup Estimates

The New York-based analyst slashed his first-quarter estimate for Citigroup to a loss of $1.66 per share from a profit of 55 cents a share and cut his 2008 profit forecast to 24 cents a share from $2.74.

Separately, the head of an investment fund controlled by Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum said Citigroup may need additional capital from outside investors as losses stemming from the collapse of the U.S. subprime mortgage market increase.

Bank of America Corp. dropped 41 cents to $39.18. Wachovia Corp. declined 41 cents to $30. Merrill also cut profit estimates for the second- and fourth-largest U.S. banks.

Goldman Sachs Group Inc. and three of the securities firm's smaller rivals had their first-quarter earnings estimates cut by Wachovia analyst Douglas Sipkin on expectations the value of mortgage assets will continue to fall. Sipkin is at least the 10th analyst in the past two weeks to reduce profit estimates for the biggest investment banks.

Goldman dropped $1.09 to $163.99. Bear Stearns Cos. rose 77 cents to $78.09 in Germany. Lehman Brothers Holdings Inc. retreated 41 cents to $48.20. Morgan Stanley shares didn't trade in Europe.

Best Buy, Barnes & Noble

Best Buy Co. fell $1.27 to $42.01 after Bank of America Corp. downgraded the biggest U.S. electronics chain to neutral from buy. The absence of new television technologies in 2008 will lead to lackluster demand, analyst David Strasser wrote in a note to clients.

Barnes & Noble Inc. may be active. The biggest U.S. bookstore chain forecast profit that may miss analysts' estimates because of fewer bestsellers like J.K. Rowling's record-breaking Harry Potter and the Deathly Hallows.

Barr Pharmaceuticals Inc. rallied $4.83 to $50.50. Bayer AG, Germany's biggest drugmaker, said a federal judge in New Jersey invalidated a patent on the contraceptive Yasmin in a victory for generic-drug maker Barr.

Federal Reserve Chairman Ben S. Bernanke will speak today on mortgage foreclosures at the Independent Community Bankers of America's National Convention and Techworld, in Orlando, Florida. Fed Board Vice Chairman Donald Kohn and other regulators are scheduled to testify before the Senate Banking Committee on conditions in the banking system.

The MSCI World Index decreased 0.3 percent. Europe's Dow Jones Stoxx 600 Index lost 0.9 percent, while the MSCI Asia Pacific Index declined 0.4 percent.