Economy
The German Ifo institute's business-climate index has declined to its lowest level so far this year, slipping to 110.4 in May from 111.2 in April and missing consensus of 110.9. "The renewed fall in the Ifo in May suggests that the German recovery may be slowing," says economist Jennifer McKeown. Growth will probably "not be strong enough to drive a rapid recovery across the eurozone or to eradicate the threat of deflation," McKeown says.

Ukrainians are due to vote in presidential and mayoral elections on Sunday, with billionaire "chocolate king" Petro Poroshenko well ahead in the polls for the main ballot. The election will come after 13 soldiers were killed in fighting with pro-Russian separatists in Ukraine yesterday. The rebels are attempting to make sure the elections don't take place in the regions where they hold sway, while a major question is whether Russia will accept the outcome of the ballot.

S&P has upgraded Spain's credit rating for the first time since stripping the country of its AAA grade in 2009, increasing its assessment to BBB from BBB- and saying the outlook is stable. "The upgrade reflects our view of improving economic growth and competitiveness as a result of Spain's structural reform efforts since 2010," S&P said.

President Obama is today expected to nominate San Antonio Mayor Julián Castro as the Secretary of Housing & Urban Development to replace Shaun Donovan. In turn, Donovan will be nominated as the next Director of the White House Office of Management & Budget to succeed Sylvia Mathews Burwell if she is approved as Secretary of Health & Human Services. Donovan would start his new job as Congress discusses whether to wind down Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC).

Stocks
Hewlett-Packard's FQ2 net profit rose to $1.3B from $1.1B a year earlier and adjusted EPS of $0.88 met expectations, but revenue slipped 1% to $27.3B and missed consensus. H-P (HPQ) said it's slashing another 11,000-16,000 positions, adding to the 34,000 cuts that it has already announced. "The rationale makes sense," says RBC analyst Amit Daryanani. But "you do worry if...it's an ongoing thing that may affect morale."

Gap's FQ1 earnings beat consensus as EPS came in at $0.58 and revenue edged up 1.1% to $3.77B, although net profit fell to $260M from $333M. The quarter began slowly but rebounded towards the close of the period, particularly at lower-cost chain Old Navy. However, Nomura analyst Simeon Siegel says that a major question at Gap (GPS) is, "Can the company drive sales and how much will it cost them?"

Credit Suisse has sold bonds valued at $5B just days after agreeing to pay $2.6B to settle U.S. charges that it helped American citizens evade taxes. Despite the hefty fine, the bond market does not look like it is penalizing the Zurich-based giant. S&P and Moody's haven't downgraded their ratings on Credit Suisse (CS), although the latter has assigned a negative outlook.

Barclays has received a fine of over £26M from the U.K.'s Financial Conduct Authority (FCA) over attempts to manipulate the price of gold. The penalty adds to fines Barclays (BCS) has received for Libor manipulation, although the latest punishment is unlikely to move the needle on the bank's bottom line. Meanwhile, Barclays has reportedly approached potential suitors about buying the firm's Spanish retail bank. A sale would be part of Barclays' strategy to refocus its operations, particularly on its U.K. business.

Attorneys general in Connecticut, Illinois and Florida are investigating eBay (EBAY) after the auction Web site disclosed this week that a database with encrypted passwords and personal information was breached in February and March. New York AG Eric Schneiderman hasn't announced a formal probe into eBay, although he wants the company to provide its customers with free credit-monitoring services.

Visa and Mastercard will stay in Russia despite pressure from a new law requiring an increased security deposit on their daily turnover. Approved in April, the law demands a security deposit of 25% on their average daily turnover, payable to the Russian Central Bank every quarter starting on July 1. The new requirement on Visa (V) and Mastercard (MA) looks like it could be retaliation for the West continuing to cautiously ramp up its sanctions against Russia.

Today's economic calendar:

10:00 New Home Sales

Notable earnings before today's open: FL, HIBB