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Stock Futures Higher After Italy Sells Debt

NEW YORK ( TheStreet) -- U.S. stock futures were edging higher after an Italian debt auction eased concerns about the deepening eurozone debt crisis.

Futures for the Dow Jones Industrial Average were up 26 points, or 23 points above fair value, at 12,245. Futures for the S&P 500 were up 3.2 points, or 3.3 points above fair value, at 1263, and futures for the Nasdaq were up 6 points, or 0.58 points above fair value, at 2390.

Borrowing costs declined at an Italian bond auction, easing concerns about lack of demand for sovereign debt in the country. Italy sold 9 billion euros of six-month Treasury bills at a rate of 3.251%, down from 6.504% at the last auction. Tomorrow, Italy will sell bonds maturing in 2014 to 2022. The government hopes to sell more than 20 billion euros in total through its auction series this week.

Yields on Italy's 10-year bonds, a gauge of general appetite for Italian issues, were down 3.16%.

"Today's Italian auction results were clearly a constructive sign for the sovereign's credit and arguably a bigger test of sentiment than tomorrow's longer-dated supply. Nonetheless, Thursday the market is once again tasked with taking down more Italian debt, this larger portion of the week's offerings in maturities ranging from 2014 to 2022," wrote Ian Lyngen, market strategist with CRT Capital Group. "That said, given the relative success of today's shorter-dated paper, expectations are optimistic for the balance."

Germany's DAX was climbing 0.04% while London's FTSE was up 0.57%. A decline in Japanese industrial production and a drop in the confidence of South Korean manufacturers pressured Asian stocks overnight. Japan's Nikkei Average settled 0.2% lower, and Hong Kong's Hang Seng was down 0.59%.

Trading volumes have been thin coming off of the long holiday weekend and heading into the next long weekend.

Rising consumer confidence figures in the U.S. Tuesday failed to lift stocks into positive territory by the close, suggesting that last week's rally is quickly fading. Stocks traded about flat, with the Dow losing 3 points and the S&P 500 and Nasdaq making small gains by the close.

On Wednesday, the dollar index was down 0.1%. The benchmark 10-year Treasury was up 3/32, diluting the yield to 2%.

February oil futures were down 34 cents but still at $101 a barrel after breaking the level on Tuesday. Demand for oil surged on worries about supply disruptions after Iran's threat to stop oil flow from the Gulf. In other commodities, February gold futures were down $3.50 to $1592 an ounce.

In corporate news, Cavium (CAVM - Get Report) lowered its financial outlook to reflect weak demand from both the enterprise and service provider markets as well as the negative impact of a hub transition by one of its major customers. The San Jose, Calif.-based company now sees revenue of $56 million to $57 million for its fiscal fourth quarter ending this month. The current average estimate of analysts polled by Thomson Reuters is for revenue of $59.7 million in the three-month period. Cavium didn't provide a bottom-line forecast but said it "believes that it under shipped to customer end demand in the fourth quarter," and that it sees gross margins coming in a percentage point lower than previous guidance because of the lower sales volume. Shares of Cavium closed Tuesday at $28.48, off nearly 33% so far in 2011, and were down 7.3% in premarket trading.

The New York Times Co. (NYT - Get Report) said after Tuesday's closing bell that it's agreed to sell its regional media group business, which includes 16 regional newspapers and other assets, to Halifax Media Holdings LLC for $143 million. The company expects the deal to close within a few weeks and expects to record an after-tax gain on the transaction in its fiscal first quarter. It anticipates net after-tax proceeds of $150 million from the sale. Shares of New York Times closed Tuesday at $7.76, down nearly 21% year-to-date.

Emcore (EMKR - Get Report) reported a fiscal fourth-quarter loss of $14.3 million, or 15 cents a share, after Tuesday's closing bell, wider than its year-ago loss of $885,000, or 2 cents a share. The Albuquerque, N.M.-based maker of semiconductor components said revenue totaled $52.1 million, down 4% year-over-year but in line with its guidance. Emcore shares closed Tuesday at 86 cents, down 20.3% in 2011, but were up 15.6% to 14 cents before Wednesday's open.

-- Written by Chao Deng in New York.

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