U.S. stocks got "euro trashed" on Monday, as the European debt crisis appears to be getting worse before it gets better, but stocks are nevertheless rallying early Tuesday.
The Dutch government, one of the most vocal critics of European countries failing to rein in their budgets, collapsed after failing to agree on a plan to bring its own deficit in line with EU rules. The Dutch Prime Minister and his cabinet resigned, and lawmakers are facing off at a critical meeting of parliament today. They must provide a roadmap for how the Netherlands plans to slash its growing debt, as well as set a date for national elections.
Continue Reading Below
The Dutch government collapse came a day after the first-round election victory of France’s socialist candidate, Francois Hollande, who has said he wants to focus less on austerity and more on economic growth. Policies under current French President Nicolas Sarkozy have been austerity friendly.
The pair of developments calls into question whether Europe's big budget-slashing policies -- used in Greece, Portugal, and even Spain -- can be enforced in more core nations, like France and the Netherlands. The Netherlands is one of a few European nations with a 'AAA' credit rating.
The drama unfolding overseas hit U.S. stocks Monday, sending the Dow Industrials lower by 102 points. Stocks are recovering nicely early Tuesday, though, with the Dow up better than 100 points.
Netflix (NASDAQ:NFLX) is a big loser this morning, after reporting its first quarterly loss in seven years last night. The movie-by-mail and streaming service said it lost $4.6 million in its first quarter. While that was narrower than Wall Street expected, investors were concerned about Netflix's future expansion as it warned of slower subscriber growth going forward. Netflix had more than 23 million streaming subscribers in the U.S. in the first quarter, and the shares fell more than 15% Tuesday.
Apple (NASDAQ:AAPL) is in the spotlight ahead of its earnings report tonight. The tech giant is projected to report another strong quarter with earnings of $10 a share on revenue of $36.7 billion. Apple shares are slipping Tuesday morning.