Worries out of Europe appear to be suggesting a flat opening for the Dow Jones Industrial Average (INDEX: ^DJI) today. Retail sales in the eurozone fell 1% in April, or 2.5% on a year-over-year basis, while the purchasing managers index reached a three-year low, with even Germany showing a contraction. The German DAX was down nearly 1% on the day.
While U.S. corporations had mostly weathered the European storm with solid profit growth, despite a high unemployment rate and other negative economic indicators, many are now singing a different tune. Tech companies like Cisco (Nasdaq: CSCO) and HP (NYSE: HPQ), along with such Europe-exposed industries as manufacturing, are warning that profits will sag because of the debt crisis. Ford and GM both reported declining sales in Europe in the first quarter.
Asian markets gained overnight, with the Nikkei up 1%.
In another strike against junk food, Disney (NYSE: DIS) plans to announce today that it will set nutritional standards for food products advertised on its TV channels and other media outlets. The new rules, for example, would prohibit current sponsor Kraft's Lunchables, as well as a host of candies, sugary cereals, and fast food. Disney will discuss details of its new health initiative at a press conference with Michelle Obama today, and the moves extend beyond advertising. The company will also cut the levels of sodium by 25% in the 12 million meals served to children at its theme parks and promote healthy eating and exercise. The decision comes in response to recommendations from federal regulators, and management said the initiative is a way of strengthening its brand as one that families can trust.
The group of G-7 finance ministers will meet today over a conference call. The emergency call has sparked optimism among some observers, who are hoping for increased stimulus to fight the slowdown over the last month.
One economic report comes out today: the Institute for Supply Management Services Index, which measures the strength of the U.S. service sector, to be released at 10 a.m. EDT. Economists are expecting a figure of 53.1, which indicates a modest expansion but is slightly below the previous month's reading of 53.5.
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