-Germany Merkel says Euro is in danger

-Germany Bans Naked Short-Selling, Swaps Speculation

-Swaps Soar on Germany’s ‘Act of Desperation’: Credit Markets

-Germany Fails to Get Other Nations to Join Short Ban

-Sovereign Woes Trigger ‘Lehman II’ Concern for Europe’s Banks

-Goldman Sachs Hands Clients Losses in ‘Top Trades’

-BofA to Sell Itau Stake, May Raise $4.4 Billion to Add Capital

-Peru’s GDP Growth May Slow after Surge in March, Bayly Says

-Greece gets $17.9 billion EU aid, to repay bond

-U.S. to probe spill as BP says more oil contained

-Berkshire Slashes Kraft Holdings, Trims Others

-Home Depot Raises Its View

-Sovereign Debt Crisis Triggers `Lehman II’ Speculation for Europe’s Banks

-UK inflation surges to 3.7%

-Roubini Says Europe Faces Second Phase of Debt Crisis after Greece Bailout

-Mexico Silent on Missing Politician; Family Appeals for Release

-Fears Intensify That Euro Crisis Could Snowball

-Oil falls to $70, lowest in more than three months

-Gold rises toward peak, investors lift ETF to record

-BP’s Oil-Spill Fight Shows Progress

-Iran agrees atom fuel deal with Turkey, Brazil

-Sovereign Funds Tighten Spigot

-Man Group to Buy GLG

-Berlin calls for euro zone budget laws

-Volcanic ash grounds hundreds of European flights

-Peru unveils $20bn issue to fund AIA deal

-Petrobras Sees No Obstacle to Sale as Debt Crisis Hurts Markets

– Euro Slumps as Jitters over Greece Return

– EU, under threat, shows new urgency in crisis

– Deutsche Bank CEO doubts Greece can repay debt

– Euro Breakup Talk Increases as Germany Sees Greece Becoming Currency Proxy

– France Sarkozy threatened to pull France out of EUR-Guardian website

– Pressure mounts on BP as Obama eyes “next steps”

– Gold hits record high as investors flock to safety

– Banks’ links with rating agencies probed

– Senate Votes to Curb Rating Agencies

– Colombia’s Mockus Loses Lead over Santos Weeks before Vote

– Lula Buoys Bonds as $5.6 Billion Spending Cut to Tame Inflation

– Cyrela First-Quarter Net Income Rises 73% on Economy

– Brazil Oil Agency announces oil discovery on website: Petrobras

News out of Germany:

*Germany finance ministry announces ban on naked short-selling at 10 most important German financial institutions

*Germany finance ministry says ban on naked short-selling also applies to cds on euro govt bonds

*German network n-TV says short-selling ban applies to stocks and euro govt bonds

News out of Italy:

*bank of Italy says banks will no longer need to account for capital losses on eu govt bonds

** EURO **

One thing they cannot prevent market participants from shorting: The EURO. Currency trading back to 122 handle, down 137 pips. The euro is and will now be bearing the brunt of the selling pressure in Europe.

US Economy:

*U.S. April consumer prices drop 0.1%; core rate unchanged *distillate inventories fell 979,000 barrels, U.S. eia says *gasoline inventories fell 294,000 barrels, U.S. eia says *crude oil inventories rose 162,000 barrels, U.S. eia says

Company News:

*Deere 2q eps $1.28, ex health-care charge $1.58; est. $1.08

UPGRADES

– Ing raised to `buy’ at sns

Upgrades

*Rio tinto raised to `outperform’ at Bernstein

*shell raised to `overweight’ at JPMorgan

Upgrades

*marathon oil raised to `buy’ at BofA

*Blackrock raised to ‘buy’ at Ticonderoga securities

*Aflac raised to `overweight’ vs. `neutral’ at JPMorgan

Upgrades

-S&P 500 energy stocks raised to overweight at RBC

DOWNGRADES

– Visa cut to ‘hold’ from ‘buy’ at stifel

DOWNGRADES

*Mcafee cut to `equal weight’ at Morgan Stanley

*credit agricole cut to `market perform’ at kbw

DOWNGRADES

*Sonoco cut to `neutral’ vs. `buy’ at BofA

*Renault cut to `underweight’ from `overweight’ at Barclays

DOWNGRADES

-S&P 500 consumer discretionary stocks cut at RBC

-prudential financial cut to `underweight’ at Barclays capital

Thursday

Jobless Claims (8:30am): Initial jobless claims have been trending gradually lower over the past several weeks, and the forecast looks for another small decline to 440,000 in the reading for the week of May 15, the week of the May labor market survey.

Philadelphia Fed survey (10:00am): The forecast looks for a modest increase in the Philly Fed survey in May in keeping with the levels of these other surveys. The April ISM manufacturing survey and IP report confirm that national manufacturing was booming early in the second quarter. Since new orders in the ISM survey were very high (65.7) and the assessment of customer inventories was very low (33.0), there is every reason to think that manufacturing growth continued strong into May.

Earnings from Computer Sciences Corp, Compuware Corp, Dell Inc, GameStop Corp, Intuit Inc, Patterson Cos Inc, Ross Stores Inc, Salesforce.com Inc, and Staples Inc

Friday

Earnings from Gap Inc and Sears Holdings Corp