Stocks set to slip as traders eye Europe

By msnbc.com news services

Stocks are set to slip Wednesday, as rising bond yields for Italy and Spain indicate worsening fears about a spiraling of the euro zone's debt crisis.

Yields on 10-year Spanish bonds moved closer to the 7 percent level which forced other nations in the bloc to seek a bailout and seen as unsustainable by many analysts.

Spain is expected to issue new bonds shortly in an effort to fund its troubled banks despite the increased borrowing costs.

Adding to the concern, Italian 10-year yields topped 6 percent for the first time since January at a bond sale, raising concerns the region is vulnerable to a contagion.

The region's fiscal woes sent the euro to its lowest level in 23 months against the dollar. U.S. equities have been closely tethered to the currency's fortunes, with a 50-day correlation between the euro and the S&P 500 index at 0.91.

In company news, Research In Motion has hired bankers for a far-reaching strategic review and to look for partnerships as the BlackBerry-maker warned it would likely report a shock fiscal first-quarter operating loss.

Apple Inc Chief Executive Tim Cook said technology for televisions was of "intense interest" but stressed the company's efforts would unfold gradually amid speculation the iPad and iPhone maker was on the brink of unveiling a revolutionary iTV.

European shares headed for a third straight month of losses on Wednesday, hit by concern over Spain's struggling banks and the country's rising borrowing costs, with charts pointing to more gloom ahead.

Asian shares slipped as fears about Spain while signs emerged that China may take a cautious stance on economic stimulus.

Reuters contributed to this report.

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