While American indexes try to extend this year's rally, events in Europe again dragged down markets. The Dow Jones Industrial Average
Europe, Europe, Europe
First, a low purchasing managers' index (PMI) signaled more trouble in the eurozone. April's preliminary PMI came in at 47.4, lower than March's 49.1. Any number below 50 represents economic contraction, whereas numbers above 50 represent growth.
Second, in the first round of France's presidential election, opposition candidate Francois Hollande beat incumbent Nicolas Sarkozy. Hollande supports more government involvement to help the economy, with a limit on public-spending growth at 1.1% per year, while Sarkozy favors austerity in line with Germany's plans to rescue the eurozone, with his public spending limited to 0.4% per year.
Third, Dutch Prime Minister Mark Rutte resigned after failing to agree on a budget that included less foreign aid and raising the retirement age from 65 to 66 to cut government spending. Without agreeing on a budget that cuts spending, the Netherlands risks a lower credit rating and higher borrowing costs.
European troubles also hurt Kellogg
The Hang Seng index fell almost 2% on news of another poor PMI number of 49.1. As Fool colleague Jeremy Bowman writes, this could hurt companies that are heavily invested in China, like Caterpillar
Meanwhile, China should factor into Caterpillar's prospects when it reports earnings on Wednesday. The company has 17 plants and nine more under construction in China, its largest market. Overall sales of excavators, a key product category, dropped nearly 50% in that country during March, a concern for some in the construction equipment business (though that figure could turn around by this summer).
Back in America
Europe didn't have the only negative news, of course. News that Wal-Mart
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