US Stock Futures Edge Higher Amid Weak Jobs Data, Spanish Debt Woes
06/14/2012| 09:13am US/Eastern
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--Stock futures seesaw around unchanged levels
--Europe falls as 10-year Spanish yields rise to euro-era high of 6.96%
--Weekly jobless claims rise more than expected
By Matt Jarzemsky and Tomi Kilgore
NEW YORK--U.S. stock futures seesawed after Spanish bonds yields rose to a euro-era high and the number of Americans filing for jobless benefits rose more than expected.
Less than an hour before the opening bell, futures on the Dow Jones Industrial Average were up 10 points, or 0.1%, to 12439. Futures on the Standard & Poor's 500-stock index edged up one point, or 0.1%, to 1310 and Nasdaq 100 futures dropped less than one point to 2522. Changes in stock futures don't always accurately predict stock moves after the opening bell.
"Stocks are stubbornly resilient here," said Todd Colvin, senior vice president at R.J. O'Brien, the Chicago-based futures brokerage and clearing firm. "There's nowhere else to go. I think that a lot of money leaving European fixed income and equity is coming here."
Initial jobless claims rose to a seasonally adjusted 386,000, the Labor Department said, higher than the 377,000 forecast by economists in a Dow Jones Newswires poll. The prior week's figure was revised higher.
U.S. consumer prices fell in May, in-line with expectations, as plunging gasoline costs offset higher rent and medical care prices. Excluding volatile food and energy costs, consumer prices rose 0.2% from April, also matching economists' forecasts.
European markets were mostly lower. The Stoxx Europe 600 was down 0.9% as investors' worries increased following the rise in Spanish bond yields, which offset reassuring news of reasonable demand at an auction of Italian government bonds. Italy sold the maximum targeted EUR4.5 billion worth of bonds, though at much higher rates than previous auctions.
The yield on Spain's benchmark 10-year bond rose to 6.96% before pulling back slightly. Moody's Investors Service downgraded Spain's debt three notches late Wednesday to Baa3, the brink of junk territory. That increased speculation that Spain is likely to have to seek an international bailout, in addition to the aid for banks its government has agreed to request. But Spain's IBEX-35 stock index edged up 0.3%, erasing earlier losses of as much as 0.8%.
Asian markets were broadly lower after the downgrade of Spain. Japan's Nikkei Stock Average lost 0.2% and China's Shanghai Composite gave up 1%.
Crude-oil futures were unchanged at $82.62 a barrel, while gold futures added 0.4% to $1626.10 an ounce. The U.S. dollar inched lower against the euro and slipped against the yen.
In corporate news, the U.S.-listed shares of Finland's Nokia dropped 9.3% in premarket trading after the handset maker announced a shake-up of management and said it would cut an additional 10,000 jobs by the end of next year as it deals with increased competition.
United Technologies said it increased its quarterly dividend by 11.5% to 53.5 cents a share. The blue chip industrial conglomerate's stock was still inactive ahead of the open.
Smithfield Foods fell 4.7% after the pork processor reported fiscal fourth-quarter earnings that missed analyst expectations, according to FactSet Research. The company also said it plans to buy back up to an additional $250 million worth of its common stock.
Write to matthew.jarzemsky@dowjones.com
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