Want an illustration of why traders are nervous about how stable earnings forecasts are? New York State Governor Eliot Spitzer is lowering projections for tax revenue by $384 million, only three weeks after presenting his budget! It's a drop in the bucket compared to the $124 billion budget, but it's a sign of how fast economic forecasts are changing.

Europe flat, but Asia showing some weakness: India's Bombay Sensitive Index was down 4.8 percent (lowest close since September); one of the largest IPOs of the year, Reliance Power, which went public in a $3 billion offering in January, was down 14 percent as the formerly hot IPO market there appears to be cooling off. Two large IPOs were pulled last week. Sterlite Industries, an Indian company which trades here, is down 5 percent pre-open.

Hong Kong down 3.7 percent, Korea down 3.3 percent as well.

Commodities advancing again this morning after moving up aggressively last week; the CRB Index, a basked of commodities, hit an historic high on Friday. Platinum and silver at new highs.

At the G7 meeting in Tokyo over the weekend, there were warnings that global markets could lapse into turmoil again, and participants vowed they would take "suitable measures to calm the financial markets" if they need to, according to EuroGroup Charmin Jean-Claude Juncker.

The IMF noted that economic slowdown in the U.S. could last for some time. The IMF lowered its 2008 global growth forecast last month to 4.1 percent from 4.8 percent.

Markets are hopeful that some kind of bailout of the bond insurers can be done this week--either an increase in the lines of credit or more equity capital. Ambac

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[ABK  Loading...      ()   ] successfully raised $1 billion in capital last week, $300 million of that from Warburg Pincus, though at a 14 percent discount.

In stock news:

1) Hasbro up 6 percent pre-open as they beat earnings and revenue expectations on strong sales of their Transformer toy line. Last week they increased their dividend 25 percent and authorized an additional $500 m in buybacks.

2) Korean handset maker LG Electronics says it has no interest in buying Motorola's handset business.

3) Loew's reported earnings well below expectations; the main problem seems to have been a 50 percent decline in profits at CNA, one of the largest commercial insurers in the country. CNA had investment losses tied to their subprime exposure.

4) SocGen announced they were set for a rights offering at a 39 percent discount to its stock price. They also revealed about $900 million of previously undisclosed write-downs.

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