Stock Futures Steady as Traders Focus on Europe

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Stock-index futures were little changed on Monday as traders paid close attention to Europe, where political advances over the weekend failed to stem anxiety over the region's sovereign debt debacle. 

Today's Markets

As of 8:45 a.m. ET, Dow Jones Industrial Average futures rose 11 points to 12,123, S&P 500 futures slid 2.8 points to 1,259 and Nasdaq 100 futures gained 0.25 point to 2,350. 

Market participants have been fixated on Europe for weeks as single headlines have caused triple-digit spikes and plunges on the Dow repeatedly.  Last week, a late-week rally offset a powerful selloff, knocking the broad S&P 500 and Nasdaq indices into the green for the year, joining the blue chips, which were already in positive territory. 

"Europe breathed a sigh of relief over the weekend," analysts at Nomura wrote in a note to clients on Monday. 

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Italy's lower house of Parliament passed a critical budget-reform bill on Saturday that paved the way for its scandal-ridden premier Silvio Berlusconi to resign.  Former European Union Competition Commissioner Mario Monti was tapped to run an emergency unity government that will seek to cut the euro zone's third-biggest economy's $2.6 trillion in public debt, and, perhaps more importantly, restore market credibility in the country.  

An auction of Italian bonds held early Monday showed investors remained skittish.  The $4 billion swath of 5-year notes was sold at a yield of 6.29% -- the highest in 14 years.  Still, investors demanded 1.47 times the amount of bonds offered, that compares to a weaker 1.34 times in the previous auction. 

The higher the yield the country pays, the more expensive it becomes for it to refinance the billions of euros in debt it needs to refinance this year, and the greater the chances it will need a rescue like Greece, Portugal and Ireland. 

Traders will still be paying attention to Greece, a much smaller economy, where newly-minted Prime Minister Lucas Papademos was working to forge a government to ensure the country does what is necessary to receive rescue aid it needs to avert a default.  However, the leader of the New Democracy conservative party, Antonis Samaras, said Monday his coalition would not support new austerity measures demanded by international lenders. 

European blue chips sunk 1.6%, while the euro plummeted 1.2% to $1.365. U.S. Treasury yields, meanwhile, pointed modestly higher.  The 10-year note yields 2.075% from 2.057%. 

Energy markets were broadly to the downside.  The benchmark crude oil contract traded in New York fell 93 cents, or 0.94%, to $98.04 a barrel.  Wholesale RBOB gasoline fell 3 cents, or 1.3%, to $2.57 a gallon. 

In metals, gold dropped $9.50, or 0.53%, to $1,779 a troy ounce. 

Corporate News

Berkshire Hathaway has acquired a 5.5% stake in IBM (IBM) for $10.7 billion, the firm's biggest investment in a technology company to date. 

Lowe's (LOW) posted quarterly results that topped Wall Street's forecast on both the top and bottom line. 

Foreign Markets

European blue chips sunk 1.6%, the English FTSE 100 fell 0.75% to 5,504 and the German DAX slid 1.1% to 5,988. 

In Asia, the Japanese Nikkei 225 jumped 1.1% to 8,604 and the Chinese Hang Seng soared 1.9% to 19,508. 

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