Stocks set to slip as investors eye Europe

By msnbc.com news services

Stocks are set to slip Thursday, as investors keep an eye on developments in Europe.

European stocks dropped 1 percent and the euro turned lower on the day against the dollar on Thursday morning after benchmark 10-year Spanish government bond yields rose to hit 7 percent, a level deemed too expensive for a sovereign to continue borrowing cash over the long term.

Moody's slashed its rating on Spanish government debt by three notches to 'Baa3' from 'A3', saying the newly-approved euro zone plan to help Spain's banks will increase the country's debt burden.

Italy was also in the spotlight as the country's borrowing costs jumped at a bond auction on Thursday.

Tech shares will be in the spotlight after loss-making Finnish cellphone maker Nokia said it plans to cut another 10,000 jobs globally in its biggest revamp in recent history, while it warned the second-quarter loss from its cellphone business would be larger than expected.

Stockton, California, faces a growing likelihood of defaulting on some of its debt obligations as the conclusion of confidential talks with its creditors aimed at averting bankruptcy nears, Moody's Investors Service said in a statement on Wednesday.

Wall Street ended lower on Wednesday as fears ahead of the weekend elections in Greece finally drove down a market that had been treading water through most of the day.

Reuters contributed to this report.

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