This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Fragile European Economy Dampens CEOs' Outlook

Stocks in this article: CAT DOW F MCD UPS

SCOTT MAYEROWITZ

NEW YORK (AP) â¿¿ Deteriorating financial conditions in Europe are weighing down companies' profits. And hope of salvation from other regions â¿¿ such as China, Brazil and the United States â¿¿ is starting to dim as those economies weaken.

That's the message from this week's parade of second-quarter earnings from some of the world's largest companies.

"The new reality is that this world is not in a normal growth mode," Dow Chemical CEO Andrew N. Liveris said on a conference call Thursday. "And it does not appear that we will see this for at least 12 to 24 months."

One CEO after another told investors and Wall Street analysts that Europe was making them nervous.

Royal Caribbean CEO Richard D. Fain said, "The steady drumbeat of negative news emanating out of Europe is certainly having an impact." The chief executive of German automaker Daimler AG, Dieter Zietsche, referred to "economic clouds in the sky, which are floating especially over Europe."

Europe's debt crisis has worsened over the past few months. Six of the 17 nations that use the euro currency are in recession. Solutions have proven elusive.

Because the global economy is so integrated, what happens in Europe doesn't stay in Europe. As Europeans buy fewer cars, for instance, profits of American automakers fall. Ford Motor Co. expects to lose more than $1 billion in Europe this year. Europe's slowdown also hurts factories in China. In turn, those Chinese factories buy less iron ore from Brazil.

So, after three years of trying to crawl out from the Great Recession, companies are once again faced with "uncertainty," ''headwinds," the prospect of "slow growth" and any other corporate buzzword you can think of. For many, their prospects aren't looking good.

But not every company is so glum. Heavy construction equipment manufacturer Caterpillar reported blockbuster earnings Wednesday, driven in part by companies making long-term investments to upgrade their aging machines.

1 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,625.95 +269.08 1.55%
S&P 500 2,043.88 +30.99 1.54%
NASDAQ 4,718.6120 +74.30 1.60%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs