Caterpillar and Whirlpool Breed Optimism

Europe trading up, despite yields widening on Greek debt once again.

Elsewhere, two big companies reported sales and earnings better than expected, both raised guidance:

1) Caterpillar up 4 percent pre-open, reported earnings of $0.50, significantly above expectations of $0.39, though revenues were light. They are raising both topline and bottom-line guidance for 2010, to $38 to $42 billion and $2.50 to $3.25 per share, respectively.

Company raised full year guidance due to "robust growth in Asia/Pacific and Latin America and continued improvement in mining and energy globally."

"Economic conditions are definitely improving, particularly in the world's developing economies," Chief Executive Jim Owens said.

3) Whirlpool up 11 percent pre-open, beat by a wide margin, $2.13 vs. consensus of $1.33, sales also increased 20 percent, but even when currency impact is removed sales still increased 11 percent. Guidance was raised to $8.00-$8.50 from $6.50-$7.00.

North American unit growth was up 11 percent, much better than expected; they are expecting full year shipments to increase 3 to 5 percent, up from previous guidance of 2 to 4 percent.

Weakness in Europe was offset by strength in Latin America, and also in Asia, where WHR raised their unit guidance to up 5 to 8 percent, from 3 to 5 percent previously.

4) The Treasury Department said it would approve a sale of 1.5 billion shares of Citigroup — and that's only the start. They hold about 7.7 billion shares, about 25 percent of the float.

3) Hertz, up 11 percent pre-open, which reported earnings and raised its full year guidance this morning, is buying Dollar Thrifty for $41 a share (80 percent cash, 20 percent stock), a roughly 5 percent premium to Friday's close. Doesn't sound like much, but DTG was $1.99 a year ago! The commentary is that the deal makes sense, in that there has already been $180 million in synergies identified (this also happened when Avis bought Budget). Avis also trading up about 6 percent.

5) Humana is up 4 percent preopen after reporting first quarter earnings of $1.19 a share (ex items), beating expectations by a nickel per share. The second largest supplemental health care provider for seniors says higher premiums and government sector (Medicare) enrollment offset declines in its commercial business. First quarter gains leading Humana to raise 2010 earnings view to $5.55-$5.65 a share from the $5.15-$5.35 range.

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