The Before the Bell report is updated throughout the morning to reflect latest developments. Colin Cieszynski will return.
Disappointment over the failed talks to curb global energy production moderated in the lead-up to the North American open, with futures contracts pointing to modest losses on the day.
Initial sharp declines in European stocks, oil prices, and the Canadian dollar have all been pared back after discussions among major energy producers in Doha ended without a production freeze.
Crude oil benchmarks fell by close to 7 per cent overnight, before regaining some of that downside. The oil market maintained its heavy influence over investor sentiment, with U.S. and Canadian stock futures dipping, then rallying to head toward the opening bell down by 0.3 per cent.
Energy and equities have traded in an unusually tight correlation throughout the course of the oil glut, with both having advanced steadily since bottoming out in February.
But with hopes of a Doha deal dashed, several energy analysts have reduced their forecasts for average oil prices for the first quarter to the mid-$30s (U.S.). At around 7:30 am, West Texas intermediate (WTI) futures were trading at $38.90.
A strike by oil workers in Kuwait helped mitigate the losses in Brent crude, while a decline in U.S. drilling activity to 2009 levels did the same for West Texas intermediate.
Meanwhile, investors will look for cues on the U.S. profits recession, as first-quarter earnings season gathers steam this week.
Morgan Stanley reported its financial results before market open this morning, and although its profits fell by more than half, it still easily beat low analysts' expectations.
Earnings results from Netflix Inc. and IBM Corp. are expected after market close today. In Canada, watch for Rogers Communications to post its latest results after the closing bell as well.
Now, here is a closer look at what's going on this morning and what is still to come.
MARKET DATA: (as of 7 am ET:)
Futures
Dow -0.24 per cent; S&P 500 -0.30 per cent; Nasdaq: -0.25 per cent; TSX 60 -0.2 per cent
Equities
Japan's Nikkei 225 -3.40 per cent
Shanghai composite index -1.43 per cent
Hong Kong's Hang Seng -0.73 per cent
Germany's DAX +0.04 per cent
London's FTSE -0.26 per cent
France's CAC 40 -0.21 per cent
Commodities
WTI crude oil (Nymex May) -3.64 per cent at $38.89 (U.S.) a barrel
Gold (Comex June) +0.35 per cent at $1,238.90 (U.S.) an ounce
Copper (Comex May) -0.42 per cent at $2.14 (U.S.) a pound
Currencies
Canadian dollar +0.0026 at 77.56 cents (U.S.)
U.S. dollar index -0.089 at 94.607
Bonds
U.S. 10-year Treasury yield -0.0044 at 1.75 per cent
KEY ECONOMIC RELEASES
(10 a.m. ET) U.S. NAHB Housing Market Index for April. Consensus is 59, up from 58 in March.
KEY STOCKS TO WATCH
Morgan Stanley's quarterly profit more than halved as the Wall Street bank's trading and investment banking businesses took a hit from market volatility early in the year. But the bank still handily beat market expectations, helping to push up its shares 2.8 per cent to $26.49 in light premarket trading on Monday. Earnings applicable Morgan Stanley's common shareholders fell 54.4 per cent to $1.06 billion, or 55 cents per share, in the quarter ended March 31, from $2.31 billion, or $1.18 per share, a year earlier. Excluding an accounting adjustment, the bank also earned 55 cents per share. Analysts on average had expected earnings of 46 cents per share, according to Thomson Reuters I/B/E/S.
PepsiCo Inc. posted first-quarter profit that beat analysts' estimates after North American snack sales rose, helped by price increases. Earnings were 89 cents a share, excluding some items. Analysts estimated 81 cents, according to data compiled by Bloomberg. Sales fell 2.9 per cent to $11.9 billion, matching analysts' average projection.
Other earnings today include: Brown & Brown Inc.; Celanese Corp.; International Business Machines Corp.; J B Hunt Transport Services Inc.; Lennox International Inc.; M&T Bank Corp.; Netflix Inc.; Rogers Communications; Royal Caribbean Cruises Ltd.; W W Grainger Inc.
With files from wire services
Tim Shufelt