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Dollar Down -- But Asia Weakness May Still Help

The Shanghai Composite dropped another 5 percent today, to a new low, but they are not the only ones. Hong Kong, Singapore and Malaysia are also at new lows.

The dollar is down for the first time in 11 days.

The bottom line, though is that the dollar has been rallying on weakness in Europe and Asia, not on any obvious signs of a turnaround in the U.S. The argument from the bulls last week was that the U.S. will pull out of the global slowdown before anyone else.

Elsewhere:

1) Lowe's did what every retailer except WalMart has done: they beat for the quarter just ending, but guidance for the third quarter is below expectations.

However, full-year guidance was raised slightly, so they obviously feel the fourth quarter will not be a disappointment. Same store sale comps were only down 5.3 percent, better than most analysts expected. Lowe’s up 4 percent pre-open.

2) The Journal noting that Lehman may be in line for its second quarterly loss; the current quarter is ending in less than two weeks. The hope had been for a modest profit. Banks in Europe are generally weak this morning. Merrill noted in a note this morning, "We believe European banks are facing a period of further earnings downgrades as the economy slows."

3) UnionBanCal is selling the rest of itself to Mitsubishi UFJ Financial Group; Mitsubishi already owns only 65 percent of the company. The price is $3.5 billion, or $73.50 a share, a 12 percent premium to Friday's close. UB stock has held up well as it has avoided much of the subprime debacle.

4) Hersheys announced they raised prices after the close on Friday, in some cases 10 percent, all in an effort to offset higher costs. In January they raised prices an average of 13 percent.


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