Microsoft doesn't come with a built-in watermark feature, but there are two ways to simulate the look of a watermark. The first is to insert a picture of a watermark in the worksheet's header. The second way is to add WordArt on top of the worksheet data.
To add an image into the header, insert a header, then click "Picture" on the design tab in the header and footer elements group to insert the graphic. To use WordArt to mimic a watermark, pick a WordArt style and type the desired text. Change the transparency of the WordArt element to allow the worksheet data to show through the WordArt.