The Before the Bell report is updated throughout the morning to reflect latest developments. Colin Cieszynski will return.
Equity markets globally are drawing strength from resiliency in energy and unexpected strength in corporate profits.
North American futures contracts pointed to continued gains on Tuesday morning, after the Dow Jones industrial average closed above the 18,000-point mark on Monday for the first time since July. Both the Dow and the S&P 500 index are closing in on all-time highs, having rebounded quickly from a winter sell-off that nearly reached bear-market territory.
Both of those indexes, as well as the S&P/TSX composite index, were on track for opening gains of 0.3 per cent to 0.4 per cent on the day.
Positive sentiment in North American follows a strong trading day in Europe, where the Stoxx Europe 600 index was moving toward its highest close since early January. Germany is seeing a particularly sharp rally, gaining more than 2 per cent after a better-than-expected survey of investment analysts suggested things may be looking up for Europe's largest economy. The ZEW Institute said its indicator of economic sentiment rose in April to 11.2 points from the previous month's 4.3. The increase, the second in a row, compared with a consensus call of 8.2.
Crude oil benchmarks continued to advance on Tuesday, after the initial disappointment over the failed talks in Doha by major energy exporters to cap production proved to be short-lived.
U.S. crude prices fell by more than 6 per cent at one point on Monday, but those losses were quickly pared back as investors digested the news, which came as little surprise to many energy observers. West Texas intermediate settled with a 1.4-per-cent decline on Monday and has continued to rise Tuesday morning, with the June futures contract nearing $42 (U.S.) per barrel.
With energy setting a positive backdrop, investors will look for continued earnings beats in a week heavy with quarterly reports. While aggregate profits among S&P 500 companies are set to record a third straight quarter of contraction, expectations were driven so low that surpassing them substantially is all but assured.
Johnson & Johnson's stock was up in premarket trading after its first-quarter results, released this morning, came in ahead of analysts' estimates. Goldman Sachs Group Inc. shares are down slightly in the premarket after reporting a big drop in quarterly earnings. In Canada, shares in Rogers Communication should see higher-than-normal trading volumes today after the company reported earnings that slightly missed Street expectations on Monday night.
Now, here is a closer look at what's going on this morning and what is still to come.
MARKET DATA: (as of 715 am ET:)
Futures
Dow +0.32 per cent; S&P 500 +0.47 per cent; Nasdaq: +0.70 per cent; TSX 60 +0.4 per cent
Equities
Japan's Nikkei 225 +3.68 per cent
Shanghai composite index +0.31 per cent
Hong Kong's Hang Seng +1.30 per cent
Germany's DAX +2.27 per cent
London's FTSE +0.22 per cent
France's CAC 40 +1.03 per cent
Commodities
WTI crude oil (Nymex June) +1.48 per cent at $41.80 (U.S.) a barrel
Gold (Comex June) +0.72 per cent at $1,243.90 (U.S.) an ounce
Copper (Comex May) -0.72 per cent at $2.14 (U.S.) a pound
Currencies
Canadian dollar +0.0047 at 78.65 cents (U.S.)
U.S. dollar index -0.179 at 94.311
Bonds
U.S. 10-year Treasury yield +0.01 at 1.79 per cent
KEY ECONOMIC RELEASES
New-home construction in the U.S. slumped more than projected in March, reflecting a broad-based retreat that showed the industry lost momentum heading into the busiest time of year. Residential starts decreased 8.8 per cent to a 1.09 million annualized rate that was the lowest since October and weaker than any forecast of economists surveyed by Bloomberg. Permits, a proxy for future construction, also dropped.
KEY STOCKS TO WATCH
Goldman Sachs Group Inc. reported a 60 percent drop in profit as first-quarter revenue fell to the lowest since Chief Executive Officer Lloyd Blankfein took the top post in 2006. Net income declined to $1.14 billion, or $2.68 a share, from $2.84 billion, or $5.94, a year earlier. That beat the $2.48 per-share estimate of 23 analysts surveyed by Bloomberg, as the firm cut costs deeper than expected. Goldman Sachs's revenue fell 40 per cent to $6.34 billion, missing the average estimate of $6.69 billion.
Rogers Communications late Monday reported adjusted earnings of 51 cents a share, down from 53 cents a year ago. Revenue rose 2.2 per cent to $3.245 billion. Analysts had on average expected Rogers to earn 53 Canadian cents a share on revenue of $3.243 billion, according to Thomson Reuters I/B/E/S.
Harley-Davidson Inc on Tuesday posted lower quarterly net income as sales of new motorcycles declined in the United States, its biggest market. Net income fell to $250.5 million, or $1.36 per share, from $269.85 million, or $1.27 a share, a year earlier, when there was more outstanding stock. Analysts on average were expecting $1.29 a share, according to Thomson Reuters I/B/E/S.
Health insurer UnitedHealth Group Inc on Tuesday raised its expectations for 2016 profit, in part because of a more favorable tax rate that also helped it beat Wall Street expectations for the first quarter. Lower sales and administrative costs and a lower amortization of intangible assets also helped its first quarter profit rise about 9 cents more than analysts expected. UnitedHealth shares gained 2 per cent in early morning.
Philip Morris International Inc., the world's largest publicly traded tobacco company, posted first-quarter revenue that fell short of analysts' estimates, hurt by the strong dollar. Sales excluding excise taxes fell 8.1 percent to about $6.08 billion. Analysts estimated $6.28 billion, on average.
Netflix shares were down 8 per cent in the premarket after the video streaming service's subscriber forecast missed estimates.
IBM fell 4.6 per cent in the premarket after it reported its worst quarterly revenue in 14 years.
Johnson & Johnson rose 1 per cent after it reported a marginal growth in quarterly sales.
Ebay fell 2 per cent in the premarket after Morgan Stanley downgraded it to "underweight."
Other earnings today include: Comerica Inc.; Discover Financial Services; Dover Corp.; Genuine Parts Co.; Goldman Sachs Group Inc.; Illumina Inc.; Intel Corp.; Intuitive Surgical Inc.; JKansas City Southern; Navient Corp.; Northern Trust Corp.; Omnicom Group Inc.; Rocky Brands Inc.; Signature Bank; Unitedhealth Group Inc.; VMware Inc.; Yahoo! Inc
Also see: Tuesday's small-cap stocks to watch
With files from wire services
Tim Shufelt