U.S. stock futures were flat after economic reports gave a boost to sentiment amid fears that the eurozone's debt crisis is spreading to the region's core.



NEW YORK (TheStreet) -- U.S. stock futures flattened after economic reports gave a boost to sentiment amid fears that eurozone's debt crisis is spreading to the region's core nations.

Futures for the Dow Jones Industrial Average were rising 8 points, or 22.5 points below fair value, at 11,853. The index has traded down two of the last three sessions. Futures for the S&P 500 were down 0.2 points, or 4.2 points below fair value, at 1230. Futures for the Nasdaq were rising 1 points, or 8.3 points below fair value, at 2314.

U.S. economic data from the morning suggested that the labor market continues to improve. The latest read on weekly jobless claims in the week ended Nov. 12 dropped by 5,000 to 388,000, marking a seven-month low. The reading was better than economists had expected, although the prior week's claims were upwardly revised.

A 0.3% decline in housing starts in October to an annual rate of 628,000 suggested that the housing market is stabilizing and may become less of a drag on the economy. Starts were expected to have fallen to an annualized pace of 610,000 in October from the originally estimated pace of 658,000 in the prior month. September's figure was downwardly revised to 630,000. Meanwhile, October building permits increased by 10.9% to the highest level since March 2010.

"Housing data is firm due to the single family gains in starts and permits, though with permits the volatile multi-family sector is at least an eyebrow raiser," wrote David Ader, a strategist with CRT Capital Group, in a research note. However, Ader noted that the reports were consistent with other recent data. "We have a fourth quarter theme of firming," he added.

Later at 10 a.m., The Philadelphia Fed will release its business outlook index for November. The index is expected to slip to a reading of 8.0 from 8.7 in the month prior.

On Thursday, Spain paid the highest interest rates on 10-year Treasuries in a government bond auction since 1997. France, the eurozone's second-largest economy, had an easier time with its debt 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 1.5%, and Germany's DAX was slipping by 1.2%. 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.

U.S. stocks often fight their way back up after European markets close, 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 down $1.46 to trade at $101.13 a barrel. In other commodities, gold for December delivery was down $28.40 to trade at $1745.90 an ounce.

In corporate news, Applied Materials(:AMAT) was falling 2.7% after the maker of semiconductor equipment reported a 3% drop in fiscal fourth-quarter earnings of $456 million, or 34 cents a share. Adjusted earnings were 21 cents a share. Analysts were expecting profit of 19 cents. The company also said current-quarter results would come in below analysts' expectations.

Google(:GOOG) was falling 0.08% after launching an online music service 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.

NetApp(:NTAP) was plunging 8.9% after missing Wall Street's second-quarter revenue expectations and noting softness in some of its largest customer accounts. Despite, beating profit estimates, the storage provider offered weak guidance for the third quarter.

Sears(:SHLD) was falling 1.2% after its adjusted third-quarter loss of $2.57 a share came in wider than analysts' expectations and the year-earlier loss of $1.71 a share. Analysts forecasted a loss of $2.29 a share. The reported loss for the quarter was $421 million, or $3.95 a share, up from $215 million, or $1.98, a year earlier.

Williams-Sonoma(:WSM) was falling 1.8% after its third-quarter net income rose 19%. The home products retailer also raised the estimate for fiscal 2012 earnings.

The dollar was down 0.36% compared with a basket of currencies. In the bond market, 10-year Treasuries were gaining 3/32, diluting the yield to 1.99%.

-- Written by Chao Deng in New York.