Stock index futures fell on Thursday after a late selloff in the prior session as investors kept a close eye on rising yields of euro zone debt.

Spanish bond yields hit 6.98 percent, their highest level since 1997, at a 10-year auction. A French bond auction also saw high yields.

The 7 percent mark is viewed by investors as unsustainable, with both Greece and Portugal forced to seek bailouts at similar levels, as Spain was pulled deeper into the euro zone debt crisis ahead of a parliamentary election on Sunday.

European shares fell 1.7 percent in early trading, as the rising euro zone sovereign bond yields heightened worries that the currency bloc's crisis would spread further and that the region is headed for recession. <.EU>

Asian shares wobbled as doubts deepened about Europe's ability to stop the crisis from spinning out of control, with Germany and France split over the European Central Bank's bond buying role.

S&P 500 futures fell 7.4 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures were off 60 points, and Nasdaq 100 futures lost 10.75 points.

U.S. stock losses accelerated in the latter part of trading Wednesday after rating agency Fitch said while the outlook on the U.S. banking industry is stable, it could worsen if the euro zone crisis is not resolved quickly.

Investors have recently been forced to weigh the threat of a deepening crisis against U.S. economic data that has been better than expected.

Economic data expected Thursday includes weekly initial jobless claims at 8:30 a.m. EST (1330 GMT). Economists surveyed by Thomson Reuters forecast a total of 395,000 new filings, compared with 390,000 in the prior week.

Also at 8:30 a.m., the Commerce Department reports on housing starts and permits for October, while the Philadelphia Federal Reserve Bank releases November business activity survey, 10 a.m. EST (1500 GMT).

Sears Holdings Corp's quarterly loss almost doubled as weak demand at its Sears and Kmart stores hurt sales, it reported early Thursday.

Google Inc turned on the music at its new online store, aiming to wrest the lead from Apple Inc and Amazon.com Inc .

(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)

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