By Whitney Kisling Aug. 11 (Bloomberg) -- U.S. stock-index futures fell as analysts cut ratings on companies from Sprint Nextel Corp. to MBIA Inc. and Yum! Brands Inc., overshadowing a bigger-than- estimated increase in worker productivity. Sprint Nextel Corp., the third-largest U.S. mobile-phone company, declined 4.3 percent as Piper Jaffray Cos. recommended selling the stock. Yum! Brands Inc., the owner of the Pizza Hut and Taco Bell chains, slumped 2.4 percent on a downgrade by UBS AG. MBIA, the biggest bond insurer, tumbled 11 percent after JPMorgan Chase & Co. cut the shares to “underweight.” Standard & Poor’s 500 Index futures expiring in September slipped 0.6 percent to 1,001.5 as of 9:13 a.m. in New York after climbing as much as 0.3 percent earlier. Dow Jones Industrial Average futures lost 0.5 percent to 9,271 and Nasdaq-100 Index futures decreased 0.7 percent to 1,601.75. “Most companies have beat earnings estimates, but they did it through cost savings,” said Alan Gayle, the Richmond, Virginia-based director of asset allocation at Ridgeworth Investments, which manages $60 billion. “Now market expectations are being raised. The pressure is going to be on now that the consensus is we’re beginning a recovery.” U.S. stocks declined yesterday, led by commodity producers and retailers, after four weeks of gains left the S&P 500 trading at the highest level relative to earnings since 2004. The measure was valued at 18.6 times the profits of its companies as of Aug. 7, the highest ratio since December 2004, according to weekly Bloomberg data. Earnings Watch Earnings topped analysts’ estimates by 10 percent on average for three-quarters of the 450 companies in the S&P 500 that released results since June 17, according to data compiled by Bloomberg. Profits slumped 30 percent in the period, a record eighth straight quarter of declining earnings. Sprint Nextel lost 4.3 percent to $3.55 in early New York trading as Piper Jaffray cut its recommendation on the shares to “underweight” from “neutral.” Yum! Brands dropped 2.4 percent to $35.66 after the owner of the Pizza Hut and Taco Bell restaurant chains was downgraded to “neutral” from “buy” at UBS AG, which cited “sluggish” U.S. sales. MBIA declined 11 percent to $5.48 after JPMorgan cut the shares to “underweight” from “neutral,” citing “concerns over earnings quality and potential losses.” The stock surged 12 percent since Aug. 5, when it reported quarterly profit that exceeded analysts’ estimates. Productivity The productivity of U.S. workers grew in the second quarter at the fastest pace in almost six years as employers squeezed more out of remaining staff to bolster profits. Productivity, a measure of how much an employee produces for each hour worked, rose at an annual 6.4 percent pace, more than forecast, after a 0.3 percent gain the prior three months, Labor Department data showed. Labor costs fell 5.8 percent, the most in eight years. Exxon Mobil Corp. declined with the price of U.K. natural gas, which retreated as supply was forecast to increase. Deliveries to Exxon Mobil’s St. Fergus terminal stopped yesterday. Flows into Royal Dutch Shell Plc’s Bacton Seal terminal in eastern England halted at 9 p.m. London time last night, according to data from the country’s grid manager. Exxon Mobil fell 0.5 percent to $68.81. Lions Gate Entertainment Corp., the biggest independent movie studio, surged 11 percent to $7.16 after it reported a first-quarter profit on higher television revenue and the addition of the TV Guide channel. Analysts forecast a loss. The S&P 500 must rally 55 percent to surpass its all-time high of 1,565.15 set on Oct. 9, 2007. Before November, it had remained above 1,000 for five years. The gauge jumped 49 percent from a 12-year low on March 9 through last week, the steepest surge since the Great Depression, as three quarters of its companies that posted second-quarter earnings beat consensus analyst estimates. To contact the reporter on this story: Whitney Kisling in New York at wkisling@bloomberg.net.

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