EU Deal Euphoria Fades
That didn't last long: euphoria over the EU deal already wearing off: Spain down 5 percent, Portugal down 3 percent, Italy down 2 percent...euro weakness resumes.
At least Germany backed the plan: German Chancellor Angela Merkel got cabinet backing for the euro loan guarantees.
But some are arguing that letting the euro continue to devaluate will be a long-term help to the EU economy, improving their export position. Remember, that is what happened to the U.S. dollar after 2002...the U.S. allowed the dollar to weaken, and it helped improve our exports dramatically.
Still, it's the opposite of yesterday: European banks are weak, many down 4 percent (that's only a third of the gains they had yesterday), commodity stocks like Mittal and Rio Tinto are also weak.
1) Engineering and construction giant Fluor falls 7 percent after reporting disappointing sales in its Q1 earnings reporting. Despite reporting better-than-expected Q1 earnings ($0.76 vs. $0.74 consensus), both sales and earnings were dragged down by lower spending by its oil and gas customers (oil and gas is over half of their sales by segment)
They reaffirm full-year guidance, inline with the Street's estimates ($2.80-$3.20 vs. $2.98 consensus).
2) LDK Solar rises 5 percent on a better-than-expected earnings Q1 report ($0.06 vs. $0.01 consensus). Good signs for the solar wafer maker: 1) sales rose more than expected, growing 23 percent and 2) margins jumped by nearly 15 percent points.
Looking ahead, the firm guides Q2 and full-year revenues significantly ahead of Street estimates as demand and margins continue to improve.
3) InterContinental Hotels reported a 15 percent rise in Q1 earnings. More importantly, the hotel operator has seen improving revenue trends as the year has progressed with business travel gradually improving. They are a big manager of Holiday Inns and InterContinental Hotels.
Reversing a 3.8 percent decline in revenue per available room (RevPAR) in January, it has seen gains of 4.1 percent and 5.2 percent in March and April, respectively. Also helping its results last month - a 27 percent jump in RevPAR at its hotels in China.
4) JCPenney is down 3 percent after being lowered to "neutral" at JPMorgan. The analyst cites lower selling prices due to greater competition from Macy's for the downgrade as well as his concerns over the department store's home business.
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