S&P Warns on Spanish Bank Losses

Europe is weaker as Standard and Poor's is warning of mounting losses at Spanish banks: "Mainly because of our greater loan loss expectations for the real estate sector, we have raised our estimates for systemwide loan losses from 2009 through 2011," analyst Elena Iparraguirre said.

Existing home sales for May out at 10am ET, new home sales tomorrow, with Lennar and KB Home reporting earnings on Thursday and Friday.

Elsewhere:

1) Jefferies reported better-than-expected earnings ($0.41 vs. $0.36 consensus) as its robust investment banking operations drew in record revenues (up 112 percent from year ago quarter). This is intriguing, since in general investment banking at the bigger firms has not done great in Q2.

2) So, you're bullish, right? Bernstein out with a howlingly bearish call on Nokia with the headline "Worst Case Scenario Not Priced in Yet." Yeesh! Stock is at a 12-year low. Bernstein notes:

a) "Nokia is losing ground in a high-end segment that represents a growing share of the market. All Western Europe is now at risk for Nokia..."

b) "Android is changing the competitive landscape much faster and further than we initially thought, posing a major threat to Nokia's mass market business."

3) Walgreen falls 1 percent after missing estimates ($0.54 vs. $0.57 consensus) amid lackluster sales, particularly in non-prescription items. General merchandise comps rose just 0.1 percent in the quarter, while prescription sales rose a better 5.7 percent. The company cited a sluggish economy, a lower number of flu cases, and slowing generic drug introductions as causes for the disappointing sales.

4) The consumer still seemed to be very cautious even leading up to the Father's Day holiday. The International Council of Shopping Centers (ICSC) reported chain store sales fell again in the latest week. The 0.5 percent decline last week was the 2nd straight weekly decline, and the fourth in the past six weeks.

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