What’t the Story?

by CC April 24, 2012 8:57 am • Commentary


U.S. stock futures rose, following yesterday’s slump in the Standard & Poor’s 500 Index, as a report may show that sales of new homes increased for the first time this year and concern about Europe’s debt crisis eased.

Texas Instruments Inc. (TXN) climbed 3 percent as the largest maker of analog semiconductors forecast a revival in chip orders. 3M Co. (MMM), the maker of Post-it Notes, advanced 2.9 percent as profit beat estimates. Netflix Inc. (NFLX), the largest video- subscription service, tumbled 15 percent as it forecast a slowdown in growth of U.S. streaming customers.


Italy paid a full percentage point more than a month ago to sell 3.44 billion ($4.5 billion) euros of zero-coupon bonds at an auction on Tuesday, as worries about politics in the Netherlands and France weighed on euro zone debt markets.


Steady demand allowed the Treasury to roughly sell the 3.5 billion euros ($4.6 billion) maximum of fixed rate and inflation-linked bonds it had hoped to sell ahead of a more challenging longer-term bond auction later this week.

It paid 3.36 percent on its two-year fixed-rate bond, up from 2.35 percent a month ago – reflecting both growing nerves around Italy and Spain’s finances and the commitment of euro zone’s core economies to a path of budget austerity.

These levels compare to a euro-era high of 7.8 percent for the zero-coupon paper at the height of the crisis in November, when Italy’s debt pile was threatening to spiral out of control.


Spain’s short-term borrowing costs nearly doubled on Tuesday at a well-sold auction of 3- and 6-month Treasury bills as investors demand ever higher premiums while the government struggles to convince markets it can control its finances.

The Treasury sold 725 million euros ($951.53 million) of the 3-month bill and 1.2 billion euros of the 6-month bill, hitting the top end of the target range for both of 1-2 billion euros.

Yields spiked from the last time they were sold in March.

The average yield on the 3-month bill was 0.634, up from 0.381 percent, while it was 1.580 percent on the 6-month bill compared with 0.836 percent a month ago.


Spooked investors are paying up for Apple Inc. options as the tech behemoth’s shares continue to slide.

Options prices for Apple stock have risen to their highest level since just after the death of founder Steve Jobs last fall. That means Apple’s implied volatility—a measure of the market’s expectations for future stock swings based on options prices—is at its highest level since October. Implied volatility typically increases as demand pushes options prices higher.