This morning, markets are digesting news of a Moody's downgrade on Spanish debt, which has brought the country's rating only one level from junk status. Spanish bond yields have hit record highs today in response, nearing 7% on the 10-year bond. Following the country's new $125 billion aid package, government debt will stand at 90% of GDP, up from 60% in 2010. Concerns are also rising in Italy, where a morning bond auction saw yields on that country's bonds rise as much as 1.4% versus last month. European markets were slightly lower in response, while futures on the Dow Jones Industrial Average (INDEX: ^DJI) were pointing to a slightly higher open in the past hour.

Mobile mayhem
's (NYSE: NOK) fall from grace hit a new level this morning as the company announced plans to reduce an additional 10,000 positions from its workforce. The move is expected to help cut costs by an incremental 2 billion euros by the end of 2013, on top of the existing goal of 1 billion. The company, which is hitching its success to Microsoft's mobile operating system, now expects operating margins in its mobile-device segment to deteriorate from first-quarter levels.

Kroger goes for the jugular
The only notable earnings report this morning is that of grocery retailer Kroger (NYSE: KR). Analysts are expecting 6% sales growth from the grocer, second only to 800-pound gorilla Wal-Mart. With many customers remaining cost-conscious, Kroger has embraced its customer loyalty program and special discounts to retain customers affected by high unemployment and gas prices. Kroger has also focused on private-label food options in its stores. On Monday the company announced that it would soon begin selling a private-label version of Green Mountain Coffee Roasters' (Nasdaq: GMCR) popular K-cups, causing shares in the latter to fall nearly 8% on the day. Fellow grocer SUPERVALU (NYSE: SVU) is looking to emulate Kroger more broadly in private labels, recently announcing its own plans to more than double private-label product options on its store shelves.

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