U.S. stock futures were following European stocks lower after weak government bond auctions in Spain and France deepened fears that Europe's debt crisis is spreading to the region's core nations.
NEW YORK (TheStreet) -- U.S. stock futures were following European stocks lower after weak government bond auctions in Spain and France deepened fears that Europe's debt crisis is spreading to the region's core nations.
Futures for the Dow Jones Industrial Average were down 17 points, or 47.5 below fair value, at 11,828. The index has traded down two of the last three sessions. Futures for the S&P 500 were down 3.4 points, or 7.3 points below fair value, at 1227. Futures for the Nasdaq were off 4.7 points, or 14 points below fair value, at 2309.
Spain paid the highest interest rates on 10-year Treasuries in a government bond auction since 1997 Thursday. France, the eurozone's second-largest economy, had an easier time with its auction but still had to pay a markedly higher price.
Meanwhile, Italy's borrowing costs have soared to unsustainable levels, with yields on its 10-year bonds at 7.06% after topping 7% in the prior session.
London's FTSE was losing 2.04%, and Germany's DAX was slipping by 1.18%. Overnight, Asian stocks closed mixed, with Japan's Nikkei Average edging up 0.19% and Hong Kong's Hang Seng down 0.76%.
Little changed in terms of political action out of Europe overnight. Stocks closed the previous session on a down note, pressured by news that Fitch Ratings predicted a worsening outlook on the credit of U.S. banks if Europe's debt crisis deepens. According to Fitch, the six biggest U.S. banks as of the end of September had a total of $50 billion in risk related to exposure to stressed nations Greece, Ireland, Italy, Portugal and Spain. The Dow slid 1.6%, with most of the losses coming in the final hour of trading.
The U.S. market often fights its way back up after Europe closes, noted Marc Pado, strategist with Cantor Fitzgerald. But, he added, as with the prior session's trading, an entire day's gains can be erased in minutes.
"The reason why it was so easy to move the financials lower and the overall market as well is that this is a very light volume environment, between earnings season, before Black Friday, in the midst of global political turmoil, and ahead of the Super Committee vote," explained Pado in a research note.
Oil was slipping Thursday after prices broke above $100 a barrel Wednesday for the first time since early June. The December crude oil contract was edging down 83 cents to trade at $101.76 a barrel. Gold for December delivery was down $15.90 to trade at $1758.40 an ounce on Monday.
U.S. economic data has been a source of optimism for investors. On Thursday, the Labor Department will release its weekly jobless claims data at 8:30 a.m. The latest claims are expected to edge up to 395,000 from 390,000, according to Thomson One Analytics.
Also at 8:30 a.m., investors expect housing starts data from the Commerce Department. Starts are forecast to have fallen to an annualized pace of 610,000 in October from 658,000 in the prior month.
The Philadelphia Fed will release its business outlook index for November at 10 a.m. The index will likely slip to a reading of 8.0 from 8.7 in the month prior.
Applied Materials(:AMAT), the maker of semiconductor equipment, reported a 3% drop in fiscal fourth-quarter earnings, and said current-quarter results would come in below analysts' expectations. The company earned $456 million, or 34 cents a share, in the quarter, down from $468 million, or 35 cents, a year earlier. Adjusted earnings were 21 cents a share. Analysts were expecting profit of 19 cents. Shares were falling 1.4% to $12.30 in premarket trading Thursday.
Google(:GOOG) launched an online music service as it tries to compete with Apple(:AAPL), Amazon(:AMZN) and Facebook in the music and entertainment space. Google Music allows users to upload up to 20,000 songs from their personal music collection for free to any device, including their computer, Android phone or tablet. Users can access the service from their PC using the Web, but must download a Music app from the Android market to listen to songs on their tablet or phone. Shares were falling 0.7% to $607.
NetApp(:NTAP) missed Wall Street's second-quarter revenue expectations, noting softness in some of its largest customer accounts. The storage maker, beat profit estimates, but offered weak guidance for the third quarter.
Sears(:SHLD) reported an adjusted third-quarter loss of $2.57 a share, wider than analysts' expectations and the year-earlier loss of $1.71. Analysts were expecting the retailer to post a loss of $2.29 a share. The reported loss for the quarter was $421 million, or $3.95 a share, compared with $215 million, or $1.98, a year earlier. Sales fell 1.2% to $9.57 billion.
Williams-Sonoma (:WSM) said third-quarter net income rose 19% and it raised its estimate for fiscal 2012 earnings.
The dollar was down 0.17% compared with a basket of currencies. In the bond market, 10-year Treasuries were gaining 8/32, diluting the yield to 1.972%.
-- Written by Chao Deng in New York.