Europe is weaker after the U.K. reported its second straight quarterly decline in GDP (1.5 percent), the weakest quarter since 1980.
The Nikkei dropped 3.8 percent on concerns about corporate earnings.
European and U.S. banks are trading down 4 to 7 percent pre-open.
Although financials, for the most part, reported horrible earnings, there were a few tech bright spots this week: Apple , IBM , and now Google.
1) Google beat already reduced expectations. Bottom line is that many companies now view online advertising as critical, so they will cut print and broadcast before they cut online. They started a new stock option exchange program for 14,000 workers whose options are under water (can I get that?).
2) Our parent General Electric down 4 percent as they reported earnings of $0.37, in line with expectations. The complaint is that "earnings quality" was poor, meaning that about $0.19 of the gain was due to a tax benefit for GE Capital, so there really was only about $0.18 of earnings from operations.
3) Wyeth up 12 percent on a WSJ report that Pfizer is in talks to acquire them for more than $60 billion. Pfizer, which has $20 billion in cash, refused to comment.
4) Still tough in the credit card business: Capital One down 13 percent pre-open after posting a much bigger loss than expected. Credit card spending was way down (down 11 percent year over year) and there was big reserves built up for anticipated losses in the future. Another worry: the potential for bankruptcy reform, including the possibility of wiping out principal debt, is a major issue for the company.
5) Harley Davidson's down 18 percent as worldwide sales fell 13.1 percent in the fourth quarter (19.6 percent drop in the U.S.). As a result, they are closing plants and cutting 1,100 jobs, and are will not be giving guidance for the rest of the year.
- GE Profit Falls 44%, Looks to Keep Dividend, Rating
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