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U.S. Stock Futures Rise as French Borrowing Costs Decline After Auction

U.S. stock-index futures rose as French borrowing costs fell in the first sale of bills since Standard & Poor’s downgraded the country.

Carnival Corp. (CCL) tumbled 14 percent in German trading after its Costa Concordia cruise liner ran aground off Italy’s Tuscan coast, killing at least six people and injuring 60.

S&P 500 Index (SPX) futures expiring in March rose 0.2 percent to 1,291.4 at 11:30 a.m. in New York, paring an earlier drop of 0.6 percent. The equity gauge climbed 0.9 percent last week and reached a five-month high on Jan. 12. U.S. markets are closed for the Martin Luther King Jr. holiday today.

“The bill auctions have been carried out without a problem, which is helpful for market sentiment toward the euro area,” said Orlando Green, a fixed-income strategist at Credit Agricole Corporate & Investment Bank in London. “The reaction to the S&P downgrade has been somewhat muted. The move wasn’t a surprise and was well-flagged for a number of the issuers.”

France sold 1.9 billion euros ($2.4 billion) of one-year notes today at a yield of 0.406 percent, down from 0.454 percent on Jan. 9. as investors shrugged off S&P’s downgrade. The agency warned on Jan. 13 that the euro area’s efforts to fight its sovereign-debt crisis have fallen short as it lowered the top ratings of France and Austria by one level to AA+. It downgraded Italy, Portugal, Spain and Cyprus by two steps and cut Malta, Slovakia and Slovenia by one level. It affirmed the grades of countries including Germany, Belgium and Ireland.

Quarterly Results

Investors will be watching fourth-quarter earnings. Wells Fargo & Co., Citigroup Inc. (C) and Microsoft Corp. are among the U.S. companies due to report this week. S&P 500 companies, which beat estimates in the previous 11 quarters, are forecast to report a 4.6 percent increase in per-share profit during the September-December period, according to projections compiled by Bloomberg.

Carnival, the world’s biggest cruise operator, slumped 14 percent to $29.64 in German trading today after a cruise ship belonging to its Costa Crociere unit capsized off Italy’s Tuscan coast. The incident will cost the company $95 million this fiscal year, and Carnival said it anticipates additional expenses that are impossible to determine at this time. The London-listed shares tumbled 16 percent to 1,878 pence, the biggest drop since October 2000.

Royal Caribbean Cruises Ltd. (RCL), the world’s second-largest cruise operator, fell 7.1 percent to $26.72 in German trading.

To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net; Tom Stoukas in Athens at astoukas@bloomberg.net

To contact the editors responsible for this story: Andrew Rummer at arummer@bloomberg.net; Nick Gentle at ngentle2@bloomberg.net

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