Goldman Upgrades Citi, Citing Consumer Credit

Euro weaker again as the Bank of Spain is taking over CajaSur, a thrift that has high levels of property loan defaults.

While Europe is weaker, they have come off their lows, as has U.S. stock futures. Oil higher, copper higher, gold higher.

Elsewhere:

1) Still trying to figure out where the financial regulatory bill will come down.

The Volcker Rule, which would prohibit prop trading (the extent is uncertain), is especially problematic. Goldman Sachs, for example, has said it generates up to 10 percent of net revenues from prop trading and private equity. But margins are very high, so the impact to earnings will be much greater.

That uncertainty hasn't prevented Goldman Sachs from upgrading Citigroup to buy from neutral, noting that consumer credit continues to improve, and capital markets benefit from the volatility we have been seeing.

2) Campbell Soup Q3 earnings topped expectations ($0.54 vs. $0.51 consensus) on margin expansion and a strong 7 percent rise in sales, spurred by effective promotional efforts. The top line growth, which was in-line with expectations, was boosted by volume increases (up 4 percent) and rising prices (up 1 percent).

For the year, the soup maker sees earnings growing at the high end of its prior forecast of $2.42-$2.46 (vs. $2.45 consensus) with sales growing more than expected.

3) IBM continues to deepen its software portfolio. The Dow component announced it's acquiring AT&T's business software services unit, Sterling Commerce, for $1.4 billion in cash. The deal is expected to close in the second half of the year.

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