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US futures slide on worries about European debt

In an April 2, 2012 photo traders work on the floor of the New York Stock Exchange. Wall Street was headed to a lower opening Thursday April 5, 2012, with Dow Jones futures down 0.2 percent and S&P 500 futures losing 0.2 percent (AP Photo/Richard Drew)

NEW YORK (AP) -- U.S. stock futures slid Thursday, a day after the market posted its worst losses in a month, on renewed fears about the European debt crisis.

The Dow Jones industrial average futures fell 40 points to 12,965. The Standard & Poor's 500 index futures slipped 4.8 points to 1,388.4. The Nasdaq composite futures fell 1.25 points to 2,735.25.

Unease in Europe overshadowed the latest U.S. job figures and strong March sales from retailers.

The number of people seeking U.S. unemployment benefits fell to a four-year low last week, the Labor Department said Thursday.

On Friday, the government issues its March jobs report, which is expected to show the fourth straight month of strong hiring.

However, it was new evidence from a struggling Europe that investors were watching.

Spain on Thursday saw yields for its 10-year bonds rise to 5.75 percent, signaling unease about the prospects of yet another bailout for a European Union country following Ireland, Greece, and Portugal.

Spain's economy is much larger and the prospect of an economic crisis in a country where unemployment is already lingering near 23 percent has helped to create a growing sense of risk.

The potential for a European recession is driving up borrowing rates elsewhere on the continent as well. France saw borrowing rates tick upward with investors believing that holding the debt is now more risky.

Italy's yield has also spiked in recent days to 5.43 percent.

The FTSE 100 index of leading British shares fell 0.7 percent at 5,666 while Germany's DAX fell 1 percent to 6,713. The CAC-40 in France was 1 percent lower at 3,281.

The first sales numbers began to arrive early Thursday from U.S. retailers, and it suggests a U.S. consumer base that is growing more confident.

Target Corp., Macy's and sports retailer Zumiez all reported better-than-expected sales for March.

The long-struggling Gap Inc. is one of the biggest success stories. Revenue in stores open at least one year rose 8 percent, better than the 5.4 percent rise analysts polled by Thomson Reuters expected.