1) Ann tells you all you need to know about retail: first quarter profit was down 75 percent. Yikes!
You can't just blame it on a big restructuring charge. Sales were short of forecast as well, up 2.8 percent, but the flagship Ann Taylor stores saw a decline of 2.3 percent in same store sales. The only good news: sales picked up in April and May. Sales guidance of $670 million is basically in line with expectations, as is same store sales expected up in the low single digits.
Big Lots, the closeout retailer, did a bit better. Earnings of 50 cents were well above consensus. They even had a positive comp store sales number: up 0.9 percent; most were expecting a decline. They also raised their outlook for fiscal year slightly, to $2.35—$2.50, up from $2.25-$2.45. They are also very big in share repurchases: they have bought back about 3.3 million shares since the beginning of the year; that's roughly 5 percent of the shares outstanding.
2) Reuters ran an interesting piece on Chinese iron-ore demand overnight, noting that Chinese steel mills are cutting back on long-term iron ore contracts in favor of cheaper spot contracts. The buyers believe that iron ore prices will remain low for many years and don't need long-term contracts. While iron ore demand is still near record levels, the article quotes the head of Vale's ferrous metal division that for the first time, supply is greater than demand.
--By CNBC's Bob Pisani