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Global Markets Respond to Strong Earnings — Finally

For the second day in a row, global markets and U.S. futures responded to strong earnings reports. Last week, when investors sold bank stocks off after seeing no loan growth, there was considerable worry that this could turn into a "sell on any news" quarter with other sectors as well.

As we approach the halfway mark in earnings season, that does not appear to be happening. Strong results among global manufacturers--industrials, tech, and commodity companies--is moving the dial.

Apple , Nokia , DuPont , Honeywell , Qualcomm , General Electric* and others all traded up on earnings.

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Elsewhere:

1) More ganging up on the dollar: you name it...Aussie dollar, Canadian dollar, Swiss franc, euro, yen...all stronger against the dollar. Dollar index at a 3-year low.

2) Even retail guys are trading less. ETrade said trading volume was down 5 percent so far in April...this, after most online brokers reported trading volumes down 5 to 10 percent in March compared to February. Volumes have been anemic: consolidated volume on the NYSE has averaged about 4 billion shares in April, the lowest since September last year, down 30 percent from April of last year. What's going on: 1) retail guys are trading less on macro confusion, and, more importantly 2) high frequency guys are trading less because the low volatility makes it more difficult to make money.

3) Another Chinese internet blowout: China. Internet. Cloud computing. Say those three magic words, and you have a big IPO. Happened again last night: 21Vianet (VNET), which was set to price 11.5 million shares at $10-$12, was rumored 10 times oversubscribed at midday, when word began circulating that the terms were being raised to at least 12.5 million shares at $12-$13. Final pricing: 13 million shares at $15. Starts trading this morning on the NASDAQ.

4) General Electric was up, reported earnings of $0.33, 5 cents ahead of consensus. raised quarterly dividend by a penny to $0.15. Revenues were also higher than consensus. The beat seems to have come entirely from GE Capital, which earned $0.17, about a nickel ahead of most estimates. Like banks, GE Capital reported lower loan loss provisions (down 49 percent).

4) McDonald's is down fractionally despite beating estimates by a penny. Sales came in a bit higher than expectations, but growth in U.S. comps (up 2.9 percent) lagged growth overseas (Europe up 5.7 percent, Asia/Middle East up 3.2 percent). CEO Jim Skinner noted that comps in the current quarter are "trending in-line with or better than first quarter sales."

5) Although earnings missed by a penny, Yum Brands (YUM) rises 5 percent as sales grew more than expected. U.S. comps were down 1 percent, but comps in China surged 13 percent. So why the bottom line disappointment? Taco Bell sales were hurt by negative publicity targeting the chain's beef and the higher food and commodity costs. Just take a look at the cost pressures in China - food/paper costs soared 35 percent and labor expenses jumped 36 percent. The fast food company expects commodity inflation to remain "a headwind"- rising 6 percent systemwide this year.

6) Despite higher commodity costs, DuPont (DD) earnings handily beat estimates ($1.52 vs. $1.37 consensus). The key — strong global demand gave the chemical/coating maker pricing power to help offset rises in costs. Volumes rose 9 percent, while higher pricing gave an 8 percent boost to revenues. Sales overseas were particularly strong too - rising 30 percent in Latin America and 28 percent in Asia. The firm also raised its 2011 earnings forecast to $3.65-$3.85, above $3.60 consensus.

7) But then take a look at Sherwin-Williams (SHW). The paint company beat estimates in the quarter ($0.63 vs. $0.52 consensus). However, CEO Christopher Connor noted "domestic demand remains soft," but the company was able to offset some of the cost increases with higher prices. But perhaps the weaker demand isn't allowing the firm to raise prices high enough to fully offset fast-growing commodity costs. Although sales in the current quarter are seen inline with expectations (up 8-13 percent vs. up 10.6 percent consensus), earnings look to disappoint the Street ($1.65-$1.75, below $1.84 consensus).

* General Electric is a minority owner of NBCUniversal, CNBC's parent company.

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