Stocks Open Lower on News Out of Europe

Sheila Dharmarajan explains the sharp drop in the Dow.
7:07 | 10/25/11

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Transcript for Stocks Open Lower on News Out of Europe
Dow futures were down this morning. On news out of Europe dreading an -- discuss all the business headlines issue without our options from Bloomberg TV -- good to see you. Good morning Stephanie so US markets and may be at the mercy of Europe right now what is the latest in the debt crisis and why might tomorrow. Be a turning point. Yet once again it is all about Europe and the headlines coming out of the region there tomorrow -- hugely important day I cannot emphasize how important tomorrow is. And that is because once again EU leaders are meeting in Brussels to hopefully discuss. And ratify a plan to help solve the European debt crisis that it had a lot of these meetings but of course this is one of the hard deadlines they did place and -- subsidies to huge emphasis on the headlines coming out of there. A couple of things that will be discussed is one. Exactly what -- at -- -- the banks may have to take a Greek debt the banks are pushing for about 40% EU leaders -- about 60% to maybe somewhere in between. To whether they will be leverage put on the EFSF fun. Remember we Varela and that the ECB will not be tapping its own balance sheets unaudited increase the size of that fun there will be some talk of leverage within the EF SM -- -- You know having said -- that the one stumbling -- Ben. The one stumbling block excuse me two to Mars plant. Could be Germany. We have our nearest decent draft proposal -- -- Chancellor Angela Merkel has already said that there are not good with some of the things in there so of course all eyes are going to be in Germany and whether they go along with the plant. Tomorrow's headlines Stephanie this is the big day everyone will. You watching -- absolutely that's gonna have reverberated around the world as far as markets are concerned. Aren't let's mr. earnings and talk about UBS how -- losses from that rogue trader hurt their bottom line. Yes -- just taken in a big way remembering its rogue trader 'cause they 2.3 billion dollars in losses. Showed up loud and clear in UBS's -- in fact profits fell 39% from a year ago -- here is this -- It actually wasn't as -- as analysts were expecting and that's because UBS actually had a one time accounting gain. That helped offset some of those glasses -- perhaps a little bit better than what analysts were expecting but I will say. Not Sid good news coming out of the UBS -- quite yet there -- comments -- they're going to be looking to cut and their wealth management division posted their investment banking division. That of course could lead to more -- job -- -- And an -- the CEO himself saying that look this has been a very difficult quarter not only from within the company but of course from the economic perspective as well and what -- happen. The around the world okay in other earnings report folks are talking about his BP has the company never recovered from the gulf spell. Yes -- the war everyone is using when they're talking that BP and its earnings report is progress. BP is certainly making progress recovering of course from the disastrous oil spill that happen. You know profits did fall for BP in the court -- but again. Not as much as what analysts were expecting to that is certainly good news CEO Bob -- He is very focused on only doing the profitable projects is an -- eventually to be -- catch -- Suit against -- more good news there. Also remember they have been doing a lot of -- sales lately they've actually up the target for the amount of assets as they wanna do you. Again on making sure that BP get BP gets back to profitability -- And that it's really focusing on its cash -- to progress. Not my recovery but progress is the granite -- and it's easy to talk about BP. Okay on the flip side Netflix -- there isn't a -- that goes by we have been talking about this company their stock went into a tailspin after the company reported earnings. What's the full story behind Netflix now. Yes Stephanie for tell us than it did talk about a plain -- blood that's when you're talking an athlete carrying bags this morning the stock is down about 37%. That is -- adding to the more than 60% -- -- in the second we have seen since July sit next flakes. That's not getting hit very very hard by investors a couple of things coming out of their earnings report that investors did not like. First all their fourth quarter outlook came in well below estimates -- -- the companies say they expect to see 36 to seventy cents a share. About half of the dollar ten. -- here that -- actually expecting to be huge decline in outlook. The company also said they will be expecting a few more quarters of losses billion -- 2012. He did it in making his big international pushing the markets like Brazil and Mexico and the UK. Well that kind of push cost money and that is gonna hit the bottom line invested did not like to hear any of that -- -- CEO Reed Hastings did acknowledge the company's missteps. Saying that they've lost some of their good hard earned reputation that they're going to be working to build it back up. He says He does remain confident in the future the company the right now that investors now -- -- they have a lot more work to do before they get back in the country. You wonder how much of this is also sort of a PR problem at this point all right let's move on and talk about the case Shiller housing index that's -- offer. August on housing prices -- that they were up point 2%. How are -- to interpret that Sheila. Yeah -- affected members syndication has seen its -- disappoint investors over I'll remember this is an index that takes a look at the value of properties in twenty cities around the US they actually fell three point 8% when you take a look at the aggregate numbers that is more than the three and a half percent and analysts were looking for. Again you know we've been talking about the housing issue -- and the reality -- it is just going to take a long time to get through this issue. You know I had a -- the if you take a look at the peak prices in 2006 of the housing market we have fallen 31%. Since that's almost a third -- fallen since then. And the reality is it is -- going to take a long time to cycle through that -- Today's data point not exactly adding a lot of good news to the housing market but you know another month goes by hopefully that means another month closer to getting through some of that. -- -- can do out in less than half an hour of the consumer confidence level levels what are we expecting from that reports. UNICEF -- -- just been thinking of elevated tuchman live entitlement some ugly headlines vineyards -- ugly headlines about the housing market some earnings and -- been disappointing it is no wonder if that consumers aren't feeling confident these days. And that is certainly going to show up in these numbers are -- analysts are expecting the worst confidence numbers that we have seen. Since the recession still. Investing is -- consumers -- not feeling good about what's happening in the economy of course the big worry is that -- ultimately hit their pocketbook. An -- -- -- He consumer spending go down. So -- that is the big worry everything is piling on the investors now we're just have to latency for those numbers but that people definitely bracing themselves who weren't ugly -- And these first six minutes of trading shares seems like the market is reflecting certain that negative sentiment is there anything else going on -- -- looking at the -- down about a hundred and twenty points right now what's happening. -- -- -- there is one big earnings report they're really threw some cold one on the rally that we've been seen in Alaska police and that was three and 3M actually came a disappointing investors when He came to -- they also cut their 2011 outlook. Remember 3M gets about 60% of their sales from the US and from Europe. And lizard Chris the two biggest and slowing economies 3M is really considered one of those corporate bellwethers you know for industrial spending analysts industrial production. To the fact that they came out and cut their outlook not sitting well with investors we -- clearly seeing that -- the markets right now. Dow now down more than 130 points NASDAQ S&P down over percent this -- we could be setting -- -- for a very ugly case that I can. All eyes as you said on -- Sheila -- -- and some member TV thanks a lot -- have a good day. Thank you.

This transcript has been automatically generated and may not be 100% accurate.

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