Market observers have noted that the challenges in Europe will also affect U.S. multinational companies and their earnings. I don't know, however, whether analysts have sufficiently factored in reduced European sales by U.S. companies in their earnings estimates.
Oracle gave a hint about what the effects of Europe's struggles might be as it released its quarterly earnings report yesterday. Though overall the quarterly results exceeded consensus analyst estimates and the stock rose, sales to Europe, Africa, and the Middle East declined 7%. Overall revenues at the company rose only 1% in the quarter. One percent revenue growth for a growth company is not impressive, though Oracle is a fine company that is fairly valued.
While the market rebound has been welcome (and probable--note my 5/20 blog with the S & P 500 at 1295), I'd not get too comfortable. There are superior companies still selling at attractive valuations that should remain core holdings. But I still think this is more of a "guerrilla warfare" market that requires more of a nimble, trading mindset than a buy-and-hold approach.
S & P 500: 1358