Stock Market May Rebound as Soaring Bond Yields Finally Steady

New York (Jan 11)  Wall Street futures held onto modest gains heading into the start of trading Thursday, while European and Asia stocks drifted lower as a rebound for bond yields failed to offset trade tensions linked to President Donald Trump's warning on NAFTA membership.

Early indications from U.S. equity futures suggest modest gains for the three major benchmarks after stocks snapped a six-day winning streak last night amid concerns over the rapid rise in U.S. Treasury bond yields and suggestions from President Trump that he is prepared to exit the North American Free Trade Agreement if its isn't comprehensively re-negotiated.

Contracts tied to the Dow Jones Industrial Average were marked 13 points, or 0.06%, higher at 06:00am eastern time trading while those liked to the broader S&P 500 gained 1.75 points, or 0.1% from their Wednesday close and Nasdaq futures added 3 points.

The U.S. dollar index, which benchmarks the greenback against a basket of six global currencies, weakened modestly to 92.46 as Treasury bond yields fell from their 10-month peak as officials in China disputed a Bloomberg News report that suggested the country, which holds the world's biggest position in U.S. government bonds, could halt further purchases and direct their massive foreign currency reserves to other asset classes.

Benchmark U.S. 10-year Treasury yields were seen 6 basis points lower from their Wednesday levels at 2.537% while similar bonds issued by Germany were 2.5 basis points lower at 0.46%.

Xerox Corp (XRX) shares were an early pre-market mover, and surging 9.8% following a report in the Wall Street Journal that linked it to a merger with Japan's Fujifilm Holdings Corp. amid pressure from activist investor Carl Ichan to boost returns for the the photocopying and printing icon.

TheStreet