ITT is bucking the trend of major companies that have cut their dividends in response to the global financial and economic crisis. This year, Standard & Poor’s forecast calls for a 13.3 percent plunge in dividends payouts by S&P 500 companies—- the worst annual performance since 1942.

Recent examples at companies that have a major presence in the region have included cell phone giant Nokia Oyj, which cut its 2008 dividend to 40 cents from 53 cents, marking the first dividend reduction in seven years; Jones Apparel Group Inc., the parent of shoe designer Nine West Group in White Plains, which cut its quarterly dividend to 5 cents a share from 14 cents; and the department store giant Macy’s Inc., which recently announced a 62 percent reduction in its quarterly dividend to 5 cents a share.

“Unless companies believe that their financial future will improve, their need to conserve cash will outweigh their desire to pay dividends,” said Howard Silverblatt, senior index analyst at Standard & Poor’s.

Retirees and other investors who depend on reliable dividend streams may be shocked by the magnitude of the dividend reductions on the horizon. Some researchers are speculating that the current world financial crisis and economic downturn is the worst train wreck since the Great Depression during the 1930s.

Reflecting the hard times, January dividend payments at big companies were down 23.9 percent. For all of 2009, Standard & Poor’s forecast calls for a 13.3 percent plunge in dividends payouts by S&P 500 companies. That would represent the worst annual performance since 1942 when dividends fell 16.9 percent.

“The bottom line is that investors need to do a lot more homework than in years past as the prospect for future dividends remains extremely cautious,” Silverblatt said. “On former President Ronald Reagan’s 98th birthday, his words still ring true today, Trust but Verify.”

The New York-based real estate investment trust said that it will pay a dividend of 37.5 cents a share during the fourth quarter, down from from the dividend of 78.8 cents that it paid during the four previous quarters.

“Given the current capital markets environment, we have reset the dividend to reflect the company’s current policy to preserve internally generated cash flows,” Chief Executive Officer Marc Holliday said in a written statement. “Looking forward, this reset will help conserve approximately $95 million for the company in 2009.”

Analysts have been concerned that the worst downturn in the financial services industry since the Great Depression could hurt SL Green more than other real eatate companies. More than 85 percent of the company’s office leases comes from Midtown Manhattan, home to large numbers of troubled financial companies.

“Financial-services firms, which make up 42 percent of SL Green’s base rental revenue, are cutting back on head count, demanding less space and even subleasing office space that they no longer need,” Morningstar analyst Jeremy Glaser wrote in a research report. “Although demand from other sectors and international firms is picking up some of the slack, rental rates have moved downward for the first time in four years as vacancies have inched up.”

In 2007, SL Green acquired 3.6 million square feet of space in Westchester, and Stamford, Conn., helping to diversfy the company beyond Manhattan.

Glaser said that the divdend cut will help SL Green preserve capital in an uncertain economy.

“Management believes that the crisis will eventually bring opportunities to buy distressed assets at bargain prices,” Glaser said. “However, we’d still prefer SL Green pay down its debt and strengthen its balance sheet before it takes on more acquisitions.”

Shares of SL Green dropped $2.80 to $24.42 in trading today on the New York Stock Exchange. The stock is down 72 percent during the past year.

Fund manager Sam Lieber said that a “crisis of confidence” is hurting the real estate market and affecting dividend payouts.

“Given the current level of uncertainty, the board of (the fund) believes it is prudent to reduce the monthly distribution,” Lieber said in a written statement. “This decision reflects current conditions and best positions the fund to meet its primary objective of long-term capital appreciation.”

The fund is down 66 percent this year, worse than a 32 percent drop for its peers, according to Bloomberg News. The fund’s weak performance is a sharp reversal for Lieber, who racked up stellar returns during the housing boom earlier this decade by investing heavily in homebuilders. In October, managers responded to the steep sell-off by announcing plans to buy back more than 279,000 shares of the closed-end fund.

Two other funds managed at the same investment company in Purchase also announced a change in policy regarding payouts to shareholders. The Alpine Total Dynamic Dividend Fund and Alpine Global Dynamic Dividend Fund said that would maintain their regular payouts of 18 cents a share and 17 cents a share respectively for January. But the funds, citing the difficult market environment, are shifting to monthly distribution declarations, instead of quarterly.

Acadia also said it is providing an impairment charge of $4.4 million against a certain investment. That means the company’s 2008 funds from operations will be $1.17 a share to $1.22 a share, the company said. Without the impairment, the company’s projected funds from operations would have been $1.30 a share to $1.35 a share, the company said.

A total of 97 of 7,000 publicly owned companies that report dividend information to Standard & Poor’s Dividend Record decreased their dividend during the second quarter. That was 439 percent increase from the 18 companies that decreased their dividend payment a year earlier. The number of companies that increased dividends fell 16.1 percent.

“Companies are very nervous about what the future holds for the economy and markets, and dividends are on the receiving end of that uneasiness,” says Howard Silverblatt, senior index analyst at Standard & Poor’s.

The dividend cuts have hurt banks and financially companies particularly hard as they deal with the fallout from the credit crunch and a weakening housing market.

Financial companies with a major presence in the lower Hudson Valley that have cut dividends in recent months include Wachovia Corp., Citigroup Inc. and Washington Mutual Inc. MBIA Inc., the Armonk-based bond insurer hobbled by the subprime mortgage crisis, opted to eliminate its dividend entirely.