Italy sells another round of bonds; investors await jobless claims
By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) — U.S. stock-index futures maintained modest gains Thursday, with Italy’s borrowing costs decreasing as it sold another round of government bonds in a test of market confidence, and as investors awaited the latest round of weekly U.S. jobless-claims data.
Futures on the Dow Jones Industrial Average DJ2H +0.23% rose 27 points to 12,108.
S&P 500 Index futures SP2H +0.35% were up 3.5 points at 1,248, while Nasdaq 100 futures ND2H +0.29% added 5.25 points to 2,264.75.
Italy sold around 7 billion euros ($9 billion) of various government bonds, with yields declining from a month ago for 3- and 10-year bonds. The sale follows Wednesday’s well-received auction of six-month Treasury bills that also saw borrowing costs decline.
Thursday’s total amount sold, however, was below the top end of the Italian Treasury’s range of €8.5 billion. The sale produced a yield of 6.98% for the 10-year benchmark, down from a euro-era high of 7.56% late last month.
Analysts described the results as a mixed bag, citing concerns over the lack of stronger demand and noting that the 10-year yield remained near 7% — a level seen as unsustainable over the long term.
“Today’s auction in Italy reminds us that stresses remain, and although today’s debt was always going to be a hard sell as it comes at the end of the year, Italy has a mountain to climb next year, as it tries to sell €400 billion of debt — half of which needs to be sold to merely refinance its original debts,” said Kathleen Brooks, research director at Forex.com.
Economic reports
The Labor Department will release its latest jobless-claims data at 8:30 a.m. Eastern. Economists surveyed by MarketWatch forecast first-time claims in the week ended Dec. 24 totaled 374,000, up from 364,000 the previous week.
The purchasing-managers index for the Chicago region is set for release at 9:45 a.m., while November figures on pending home sales are due at 10 a.m. Eastern, followed by the Federal Reserve Bank of Kansas City’s survey results for December at 11 a.m.
Alexion Pharmaceuticals Inc. ALXN -1.30% may be among shares in focus Thursday. The company announced after Wednesday’s closing bell that it agreed to acquire privately held biopharmaceutical firm Enobia for as much as $1.08 billion in cash.
Chesapeake Midstream Partners LP CHKM -0.43% said it agreed to acquire Marcellus Shale assets from an arm of Chesapeake Energy Corp. CHK +0.35% for $865 million, a deal expected to close Friday.
Plymouth, Minn.-based Mosaic Co. MOS -1.97% said it plans a temporary cutback in finished phosphate production, citing spot prices in the fertilizer market.
European equities pared gains after the Italian auction but remained higher on the day. Read Europe Markets.
Asian shares ended Thursday’s session mostly lower, as lingering worries about Europe’s debt crisis kept investors on the sidelines, analysts said. Read Asia Markets.
Wall Street on Wednesday fell sharply in moves exacerbated by thin trading conditions, analysts said. The Dow Jones Industrial Average DJIA -1.14% dropped 139.94 points, or 1.1%, to close at 12,151.41. The Dow remains up 5% on the year.
The S&P 500 Index SPX -1.25% lost 15.79 points, or 1.3%, to close at 1,249.64, pushing it back into negative territory for the year to date.
The Nasdaq Composite Index COMP -1.34% dropped 35.22 points, or 1.3%, to end at 2,589.98, leaving it down 2.4% for the year.
Also Thyrsday, Nymex crude-oil futures rose 31 cents in electronic trade to $99.67 a barrel.
The dollar index DXY +0.21% , which tracks the U.S. unit against a basket of major rivals, rose 0.4% to 80.831.
William L. Watts is a reporter for MarketWatch in Frankfurt.
