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Europe Looks Worse; Dollar Hits '08 High

The German business confidence index (Ifo) declined to the lowest levels since August 2005, increasing concerns about a weakening Europe.

The dollar has popped to its highest levels of the year.

Russia's stock market is down 5 percent to its lowest levels in six years, as most European countries are signaling they will not recognize the breakaway states of Georgia.

Elsewhere:

1) American Eagle was a penny below expectations, and guidance for the third quarter, $0.31 to $0.36, is below expectations of $0.39. August comp store sales were down 6 percent.

2) Restaurant giant Darden (Red Lobster, Olive Garden, LongHorn Steakhouse) down 13 percent pre-open, as they are updating full-year guidance, saying full-year fiscal EPS will be flat to up 5 percent, compared to the previous target of up 9 to 10 percent. Darden is in the first quarter of its fiscal year.

3) Mining giant Rio Tinto reported outstanding results, with profit more than doubling. They also increased the dividend 31 percent. Remember, BHP Billiton has made an offer to acquire Rio Tinto, which was rejected by the company. Rio Tinto itself acquired Alcan in 2007.

4) Sign of the times: we used to pass around Warren Buffett's annual report. Now, trading desks are passing around the annual report from Singapore wealth fund Temasek.

Chairman S. Dhanabalan said he sees "value" in the U.K. and the U.S., particularly in financials. The fund already holds a 9 percent stake in Merrill Lynch and a 2 percent stake in Barclays . The firm has a 40 percent of its holdings in financials as of the year ending in March.

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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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