Economy
Low inflation is a larger threat to the U.S. economy than rising prices, said Janet Yellen in her second public speech since taking the reins at the Fed. Being careful not to talk timing after her "six months" remark in her initial post-FOMC press conference, Yellen said the decision on tightening would hinge on the strength of the labor market and how quickly inflation is headed towards the Fed's 2% goal. She noted wage gains to this point have remained muted, suggesting plenty of slack in the labor market.

Consumer spending improved along with the weather, according to the Fed's Beige Book. Reports from the 12 Federal Reserve Districts suggested economic activity increased in most regions, but Cleveland and St. Louis saw declines. February's Beige Book (released on March 5) blamed Mother Nature for the slowdown - mentioning "weather" a full 119 times - but mentions were down to a mere 103 times in yesterday's report.

Stocks
Google's Q1 results missed estimates, with EPS of $6.27 shy by $0.15, and revenue of $15.42B just $90M light. Cost per click, however, was flat on a sequential basis after falling the previous two quarters. Paid clicks grew 26% Y/Y, down from 31% growth in Q4, and traffic acquisition costs fell to 23% of revenue from 25% one year ago. After falling nearly 6% in after hours trade, Google (GOOG) is down just 1.2% premarket.

American Express reported a 12% year-over-year rise in quarterly profit to $1.43B, or $1.33 per share on revenue of $8.2B (up 5% Y/Y on a FX-adjusted basis). U.S. Card Services net income of $876M grew 9% from a year ago, offsetting an 11% decline in International Card Services net income to $159M. American Express (AXP) shares are down 0.6% premarket.

SAP Q1 sales rose 2.7% to €3.7B, shy of analyst estimates of €3.8B. Operating profit of €919M gained 2%, but missed estimates of €975M. Sales of new software licenses - an indicator of future revenue - fell 5.2% to €623M. SAP, along with U.S. competitor Oracle (ORCL), is being forced to deal with a slowdown in enterprise-planning software as its business customers turn instead to products designed to be delivered and updated over the Web from the likes of companies like Salesforce.com (CRM) and Workday (WDAY). SAP is down 4% in premarket action.

Buybacks boost EPS at IBM, but hardware sales remain weak. Big Blue spent an eye-popping $8.2B in buybacks in Q1, up from $5.8B in Q4. The cut in the float allowed EPS to miss estimates of $2.55 by just a penny despite a revenue miss of $450M. Hardware/chip sales fell 23% from a year ago after a 26% decline in Q4. Asia-Pacific was a notable weak spot, with total sales there falling 12% from a year ago vs. a 4% decline in Americas. The stock is lower by 3.8% premarket.

General Electric, Goldman Sachs, and Chipotle Mexican Grill are among the businesses reporting results before the bell. GE is expected to show adjusted EPS of $0.32 on a 1.7% year-over-year decline in revenue to $34.41B. The company is reporting earnings amid a rumor CEO Jeff Immelt will step down sooner than his 20-year tenure hits in 2021. Goldman Sachs (GS) is expected to show declines in both EPS and revenue, with revenue projected to fall 9.3% to $3.44B. Chipotle (CMG) EPS is estimated at $2.83 vs. $2.14 a year ago, on revenue of $871.4M vs. $725.5M.

Mixed signals from the Fed were a major reason Citigroup (C) officials were so shocked the bank's capital plan was rejected by the central bank last month, reports the WSJ. The FRBNY reportedly agreed to give Citi until 2015 to fix a series of shortcomings identified in 2013 in the wake of that year's stress test, but Fed officials in D.C. rejected the 2014 capital plan partly because they felt the bank hadn't made enough progress. The episode is the latest in a series of communications issues surrounding the now-annual D.C. assessment of the banking industry. RBC's Gerald Cassidy sums up the feeling among many on both the buy and sell-side: "Do you always need to have somebody fail to make the test look strong and rigorous?"

Today's Markets:

In Asia, Japan flat at 14418. Hong Kong +0.3% to 22760. China -0.3% to 2099. India +1.5% to 22609.
In Europe, at midday, London -0.3%. Paris -0.2%. Frankfurt -0.2%.
Futures at 6:20: Dow -0.3%. S&P -0.3%. Nasdaq -0.2%. Crude +0.2% to $103.90. Gold -0.4% to $1298.
Ten-year Treasury Yield +1 bp to 2.64%.

Thursday's economic calendar:
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:00 Philly Fed Business Outlook
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

Notable earnings before Thursday’s open: ADS, ALSN, AN, BAX, BBT, BHI, BLK, BX, CMG, COL, CY, DD, DOV, FCFS, FCS, FHN, FITB, GE, GS, HLSS, HON, KEY, MAT, MS, ORB, PEP, PM, PPG, PVTB, SAP, SHW, SLB, SNA, SON, SYNT, TSM, TZOO, UNH, UNP, WBS, WIT, WSO

Notable earnings after Thursday’s close: ACTG, AMD, ASBC, ATHN, CPHD, SCSS