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Portugal, Greece, Spain? Don't Forget UK, German Elections

Moody's out again with the "may downgrade Portugal" line; combine that with images of Greeks protesting in the streets of Athens, and you have Portugal down 1.7 percent, Spain down 2.4 percent, Greece down 4.9 percent.

Debtor Nations
Debtor Nations

We have the British parliamentary elections on Thursday, as well as German regional elections in North Rhine-Westphalia (the most populous state) over the weekend, which will be viewed as a referendum on Merkel's party and support for a Greek bailout.

What it all means: the buy-the-dippers are on the bench just watching, and will not come back in until clarity returns to the market.

Still, even though the macro guys are pressuring and the charts are losing steam, don't think the world has abandoned equities: Much of this selloff has come from fast-money types. (More on Europe Crisis, below.)

Traders noting that there has been a huge increase in net short speculative positions in futures (most since mid 2008); we will need to see more confirmation from "real money" vanillas accounts (mutual funds, pension funds) with single stocks for the move down to be "true."

Regardless: the correlation between U.S. stocks and the rest of the world is getting tighter...many traders insisted this would happen, that it always does on the way down. "It doesn't matter if you make toothpicks or semi conductors, stocks are for sale," one trader said.

European banks like Deutsche Bank , UBS and Bank of Ireland were down 2 to 3 percent pre-open.

Elsewhere:

1) BP traded UP briefly this morning (was up 2 percent yesterday as well), as local media is reporting that they have stopped one of the three oil leaks...they havent even moved the main dome in yet, but it does not appear the flow of oil has abated.

2) Cooper Tire reported better-than-expected Q1 earnings ($0.19 vs. $0.14 consensus) on stronger demand for its tires. Revenues jumped 32 percent (significantly more than expected) on strength overseas, where sales soared 77 percent.

While sales rose significantly, so did the company's raw materials costs (up $40 million). To help offset future cost increases, Cooper Tire announced it is raises tire prices by 7.5 percent, effective June 1.

3) Anheuser-Busch InBev is down fractionally after Q1 earnings missed estimates. Strong volumes in Brazil (up 16 percent), China (up 5 percent), Canada (up 4 percent) helped offset declining volumes in Russia (down 14 percent), Belgium (down 9 percent), U.S. (down 7 percent), and Germany (down 5 percent).

While CFO Felipe Dutra sees "some very encouraging indicators" in the U.S., he cautions that "it's too early to say that the worst is behind us."

4) AMR falls 2 percent after reporting a 1.3 percent decline in April traffic, which particularly was hurt by weaker international travel due to service reductions caused by the Icelandic volcano. Traffic on its international routes fell 3.9 percent (traffic on transatlantic flights dropped 14 percent) vs. a 0.2 percent rise in traffic on its U.S. routes. However, the airline flew fuller planes, with loads rising to 82 percent vs. 81 percent last April.

5) UK insurance firm Prudential Plc falls 4 percent and AIG is down 1 percent after Prudential announced a delay in a $21 billion rights issue due to its need to further discuss its current capital position with Britain's Financial Services Authority.

The share offering was planned to help fund its $35.5 billion purchase of AIG's Asian insurance operations (AIA Group). Despite the delay, Prudential is confident it won't affect the completion of the AIA acquisition set for the third quarter, saying it is "entirely committed to the transaction."

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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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