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U.S. futures rise after Italian bond auction; Dow Jones up 1%

Published 11/10/2011, 08:06 AM
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Investing.com - U.S. stock futures were sharply higher on Thursday as risk aversion eased after Italy successfully auctioned EUR5 billion of government bonds at lower-than-expected yields and Greece named a new prime minister.

Ahead of the open, the Dow Jones Industrial Average futures pointed to a rise of 1.26%, S&P 500 futures signaled a 1.27% increase, while the Nasdaq 100 futures indicated a 1.11% gain.

Italy auctioned EUR5 billion of one-year Treasury bills at an average yield of 6.08%, the highest since September 1997, but still well below analyst expectations of 7%.

Following the auction, the yield on 10-year Italian bonds eased, after rising past the 7% threshold at which Greece, Ireland and Portugal sought international bailouts on Wednesday.

Meanwhile, Greek leaders agreed that former European Central Bank Vice President Lucas Papademos will head the country's new national unity government. 

Best Buy saw shares jump 1.42% after the electronics retailer announced earlier in the week that it would join the list of stores opening at midnight after Thanksgiving Day in what retailers are calling "Black Midnight".

Vertex Pharmaceuticals was also one of the day's gainers, with shares climbing 1.35% after the group announced that it will be initiating a Phase 3 trial of a 12-week hepatitis C treatment regimen.

Meanwhile, financial stocks were broadly lower. Goldman Sachs saw shares plunge 8.21% and Morgan Stanley plummeted 9.01%, as the two banks were discussing whether to reduce their use of market-to-market accounting, in which companies immediately take profits or losses as asset values fluctuate.

Citigroup and JP Morgan weren't far behind, with shares tumbling 8.18% and 7.08% respectively.

Elsewhere, Cisco Systems declined 3.82% after the group forecast revenue and earnings above expectations, as demand from government and companies for its network equipment remained resilient despite global economic troubles.

Elsewhere, Olympus continued to tumble with shares diving 17.12% after the company said it will likely miss the November 14 deadline for the release of its first-half earnings and will instead aim to give the figures by December 14.

Other stocks in focus included Walt Disney Co and Nvidia Corp, due to post quarterly results later in the day. 

Across the Atlantic, European stock markets were sharply higher. The EURO STOXX 50 jumped 1.12%, France’s CAC 40 advanced 0.64%, Germany's DAX surged 1.24%, while Britain's FTSE 100 posted a 0.35% gain.

During the Asian trading session, Hong Kong's Hang Seng Index plummeted 5%, while Japan’s Nikkei 225 Index tumbled 2.9%.

Also Thursday, in its monthly bulletin the European Central Bank halved its estimate for growth in the euro zone next year. The bank said it now expects the region’s gross domestic product to expand by just 0.8% in 2012, down from a previous forecast of 1.6%.

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