Market News

November 9, 2011  Wed 7:07 AM CT

U.S. stock index futures are sharply lower this morning on moderate volume amid new fears over the debt crisis in Italy.

Asia-Pacific markets closed higher overnight on news that inflation had dropped in China, allowing the Beijing government to return to more accommodative policies to stimulate economic growth.

In Europe, markets reversed sharply downward from the gains of the last several days. Italian 10-year notes hit yields of more than 7 percent, a level considered a critical point of no return for funding costs. The jump in yields triggered new margin requirements, which in turn have pressured other asset prices.

The rapid rise in bond yields came as uncertainty grew over the leadership of both Greek and Italian governments. The national unity coalition in Greece failed to appoint a new leader.

In currency markets the euro fell sharply against the U.S. dollar, as did the Swedish krona and Swiss franc. The drops pushed the dollar up nearly 1.5 percent, roughly in line with the index futures declines we are seeing this morning.

Commodity prices have been hurt by the higher dollar, with energy, agricultural products, industrial metals, and precious metals all lower. Copper is down more than 1.6 percent. Gold is off fractionally, while silver is down 1 percent.

In stock-specific news, Adobe is down more than 10 percent this morning after the company cut guidance and announced a restructuring and new layoffs after the market closed yesterday. Shares of General Motors are down by more than 5 percent this morning after the company announced weaker-than-expected earnings and revenues for the third-quarter.

Cisco Systems will announce earnings after the close tonight in a report that will be closely watched for hints as to the health of the broader tech industry.

The following S&P 500 companies will report earnings results tomorrow: Walt Disney, Nordstrom, Kohls, Nvidia, and Viacom.
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