U.S. stocks fell for a second day after a private report showed service industries unexpectedly contracted to the lowest level since October 2001, reinforcing speculation the economy has tipped into a recession.

International Business Machines Corp. and American Express Co. declined after the Institute for Supply Management’s index shrank at the fastest pace since the last economic contraction. Texas Instruments Inc. and Intel Corp. retreated as National Semiconductor Corp. posted shipments to mobile-phone makers that trailed projections. Financial shares fell on Oppenheimer & Co. analyst Meredith Whitney’s downgrade of Goldman Sachs Group Inc. and Fitch Ratings’ report that some collateralized debt obligations may lose their AAA ratings.

Standard & Poor’s 500 Index futures expiring in March dropped 18.2 to 1,360.6 at 9:15 a.m. in New York. Dow Jones Industrial Average futures lost 136 to 12,4756. Nasdaq-100 Index futures slipped 27.25 to 1,799.5. Shares fell in Asia and Europe after forecasts from Yamaha Motor Co. and Heidelberger Druckmaschinen AG signaled the U.S. slowdown is hurting earnings. [MORE]