A Deceleration at the Lower End

Reprofiling? Default for Greece is clearly on the agenda. Jean-Claude Juncker, the head of euro zone finance ministers, says they are considering "reprofiling" Greece's debt, which seems to mean extending the maturities. Call it what you want—reprofiling, or a "soft restructuring," but S&P has already noted that extending maturities is a form of default.

April housing starts and building permits were below expectations, but revisions to March helped offset some of those declines. No matter: builders are seeing little spring rebound.

Elsewhere, three Dow components report:

1) Hewlett-Packard down 5 percent pre-open, on what will no doubt go down as the infamous "Another Tough Quarter" memo to employees, urging them to be more vigilant with hiring and expenses.

Moving up the earnings by a day didn't help: while they beat consensus on a quarterly basis, $5.00 guidance for FY 2011 is below prior guidance of $5.20-$5.28 and consensus of $5.24. Remember they gave guidance of $7 for 2013 back in March, so that number is also going to be a problem.

What happened? 1) PC sales were down all over the world, 2) They were affected by Japan, and 3) "Services require some work," CEO Leo Apotheker said on Squawk Box. The key is to focus on the higher part of the value chain—servers, etc.

"The PC will remain the main computing device for business," Mr. Apotheker said on Squawk Box.

HP has been one of the worst performers in the Dow for the last year.

2) Wal-Mart reported earnings of $0.98, beat consensus by $0.03, sales have been down for 8 straight quarters

Same store sales were down 1.1 percent for Wal-Mart U.S. stores, but was a bit better than the down 2 percent or worse that many were expecting.

3) Home Depot , like Lowe's yesterday talked about the poor weather and the poor spring selling season. Earnings of $0.50 were a penny above consensus, revenues a tad below consensus. Same store U.S. sales were down 0.7 percent, a disappointment.

Total sales are still projected to increase 2.5 percent year over year. EPS for fiscal 2011 is projected at $2.24, up from previous guidance of $2.20.

Bottom line: there seems to be a deceleration in the lower end. Companies like Saks , Nordstrom , and Macy's continue to report better comps than Kohls or Wal-Mart

4) TJX , owner of TJ Maxx, reported Q! earnings of $0.78 including a 3 cent negative impact from currency impact, consensus is $0.80. Guidance for the full year is $3.81-$3.93, prior guidance had been $3.78-$3.93.

5) Dick's Sporting Goods falls 7 percent despite beating estimates by a penny. The problems: weak sales and poor guidance. Comps rose a disappointing 2.1 percent (below prior outlook of up 4-5 percent). Guidance for the current quarter of $0.47-$0.49 falls below $0.50 consensus amid a lower-than-expected 3.0 percent growth in comps.

6) MasterCard rises 1 percent after Warren Buffett's Berkshire Hathaway disclosed in a SEC filing that it now owns 216,000 shares of the credit card firm.

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