Europe Auctions to Lift Wall Street Despite Weak Data

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(REUTERS) -- Strong bond auctions in Europe set up Wall Street stocks for a slightly higher open on Thursday, though weaker-than-expected U.S. data could cap gains.

The S&P 500 geared up to hold at five-month highs after rising in six of the year's first seven sessions. It closed at 1,292.48 on Wednesday and faces technical resistance near the 1,300 level.

Italian and Spanish government bond yields fell sharply as the solid government debt auctions were taken as an encouraging sign for their hefty funding programs this year.

S&P 500 futures hit fresh 5-month highs after the auctions and held after the European Central Bank left its benchmark rate at 1 percent. The decision was in line with expectations.

The European auctions went well, yields are down in Italy and Spain, and that is giving the market a lift here, said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

Futures gains were dented after U.S. data showed initial claims for jobless benefits hit a six-week high and retail sales rose at the weakest pace in seven months in December.

This is a rally that was built on the notion that things were getting better and with these kinds of numbers, it makes you wonder, said Joe Saluzzi, co-head of equity trading at Themis Trading LLC in Chatham, New Jersey.

S&P 500 futures rose 4.2 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures gained 8 points, and Nasdaq 100 futures added 8.5 points.

Bank stocks led gainers in Europe, and U.S. peers could get a further boost. Bank of America Corp rose 1.3 percent to $6.96 in premarket trading. The KBW bank index <.BKX> has risen 10.2 percent so far this year after falling 24.6 percent in 2011.

Chevron Corp fell 2.3 percent to $105.33 premarket after the U.S. energy major said fourth-quarter profit would be significantly below the previous quarter.

Sears Holdings Corp dropped 7.8 percent to $30.33 premarket after Bloomberg reported CIT Group would no longer finance supplier shipments to the retailer.

Wynn Resorts Ltd was off 4 percent to $107.40 a day after its largest shareholder filed a request seeking records on his investments. A Bank of America/Merrill Lynch note said there was an implication in the request that funds were improperly spent.

Business inventories data for November is due at 10 a.m. EST.

(Reporting by Rodrigo Campos; additional reporting by Angela Moon; Editing by Jeffrey Benkoe)

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