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The first Italian and Spanish bond auctions of 2012 went smoothly Thursday, as the pair took in €22 billion without much stress, but that was doing little to inspire risk-takers in U.S. markets.
Bidders required a yield of 2.735% for €8.5 billion in 12-month Italian debt, down from 5.95% a month ago and 1.644% for €3.5 billion in shorter-term paper, down from 3.251% in the prior auction. In Spain, buyers took almost €10 billion in bonds due in 2015 and 2016 at yields below previous offerings.
The smooth auctions bore out in the secondary market, where the Italian 10-year yield dropped to 6.61%, from near 7% Wednesday, while Spanish 10-years fell to 5.13%, from more than 5.26%.
In the U.S., a calmer day in Europe provided little early lift. Stocks inched higher at the open then flattened out, with the Dow Jones industrial average was down 8 points to 12,442, the S&P 500 up 1 point at 1,293 and the Nasdaq unchanged at 2,711.
Dow component Chevron was a notable laggard, falling 1.8% after the oil company warned its upcoming fourth-quarter earnings will be well below the previous quarter.
Sears Holdings was also weaker, down 4.5% on reports that lender CIT Group has ceased lending to the retailer’s suppliers. Meanwhile, Chairman Eddie Lampert purchased about 4.5 million shares for his personal account from his investment vehicle ESL Investments, which has a controlling 45.1% stake in Sears, according to TradeTheNews.com.
JPMorgan Chase was among the early gainers, but slipped to a 0.4% loss in the first 30 minutes of trading. The bank kicks off reporting season for the largest U.S. financial institutions with results Friday morning. (See "Rallying Banks Try To Vault Earnings Hurdle.")
December’s advance retail sales figure from the Commerce Department came in leaner than expected with growth of 0.1%, but shares of Target still managed a 0.6% advance. The retailer authorized $5 billion in share repurchases, declared its intent to more than double its dividend over the next 5 years and announced a test program to feature Apple hubs within its stores.