The Dow Shakes Off Europe

A day after markets tanked on growing concerns over Spain and Greece, the Dow Jones Industrial Average (INDEX: ^DJI) is eyeing a flat opening as investors' worries appear to have eased. Greek Prime Minister Antonis Samaras will address his party's legislators today and is aiming to cut $11.5 billion from the budget. Moody's cast further doubt over a recovery on the Continent by downgrading its outlook on "AAA"-rated Germany, the Netherlands, and Luxembourg to "negative." A statement from the German vice chancellor also indicates that Germany may be encouraging Greece to exit the eurozone.

Countering the malaise out of Europe was a report from China that showed its manufacturing contraction improving in July as the Purchasing Managers' Index rose from 48.2 to 49.5. (A figure greater than 50 indicates growth.) Asian stocks were mixed in trading, while European markets were headed slightly down.

Two Dow stocks reported earnings this morning. Diversified chemical-maker DuPont (NYS: DD) reported an 8% adjusted gain in EPS to $1.48 and a sales increase of 7%. However, it said it now expects full-year earnings to be on the low end of its forecast of $4.20 to $4.40, citing weakness in the macro environment and currency exchange rates.

Shares of AT&T (NYS: T) , meanwhile, are up about 0.5% in premarket trading after the telecom said lower turnover helped boost earnings 8.7% to $0.66 per share, ahead of estimates of $0.63. Revenue came in slightly below expectations, and a drop in smartphone sales, which the company often subsidizes, also helped raise margins. The company sold 5.1 million smartphones, down from 5.5 million a year ago, and added 1.3 million wireless subscribers to lift its total to 105.2 million.

Other earnings reports Foolish investors may want to watch for after markets close today include Apple, Netflix, and Buffalo Wild Wings.

One economic report of note comes out today: the New Home Sales report, due at 10 a.m. EDT. The market is expecting June sales of 373,000, up from 369,000 in May. A sharp increase could be an indication of an overall recovery in the economy.

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