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Inside the Market

Premarket: As 'fiscal cliff' drama plays on, risk appetite diminishes Add to ...

U.S. stock index futures are holding steady this morning, as traders adopt a wait-and-see attitude toward U.S. budgetary talks, which are coming down to the wire with few concrete signs of an imminent deal.

U.S. jobless claims data, which came in near expectations, and an upwards revision to U.S. third-quarter gross domestic product growth, had little influence on premarket trading.

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The focus remains on the "fiscal cliff" negotiations, and the latest signals aren't very encouraging for a settlement before the more than $600-billion in automated tax increases and spending cuts are set to kick in Jan. 1.

House Republicans later today will vote on Speaker John Boehner's plan to raise taxes on incomes over $1-million. But that proposal was already met with a cool reception from Democrats. Officials from President Barack Obama's administration reportedly told leaders of business and financial services groups on Wednesday that negotiations with Mr. Boehner have deteriorated.

It now seems quite possible that negotiations may continue into next week, typically a period of rest in Washington.

Overnight markets were mixed, with Japanese stocks coming under pressure after the Bank of Japan said it could add about 10 trillion yen, or $119-billion (U.S.), to its asset-purchase program. While that extra stimulus could be seen as positive for stocks, the central bank did not issue a new inflation target as some had expected, and sounded downbeat about the economy, disappointing some investors.

Now, here's a look at what else you need to know this morning.

MARKETS:

Equities:

U.S. futures: S&P 500 +0.1 per cent; DJIA +0.1 per cent; Nasdaq -0.2

Hong Kong's Hang Seng index +0.16 per cent

Shanghai composite index +0.27 per cent

Japan's Nikkei -1.19 per cent

London’s FTSE 100 +0.07 per cent

Germany’s DAX +0.01 per cent

France's CAC 40 +0.09 per cent

Commodities:

WTI (Nymex Feb) +1.67 per cent at $89.40 (U.S.) a barrel

Gold (Comex Feb) +0.07 per cent at $1,668.80 (U.S.) an ounce

Copper (Comex Mar) -0.87 per cent at $3.57 (U.S.) a pound

Currencies:

Canadian dollar unchanged at 1.0110 (U.S.)

ECONOMIC INDICATORS TO WATCH:

Statistics Canada said retail sales rose 0.7 per cent in October from September, beating economists' expectations for a rise of 0.2 per cent. Not including auto sales, sales rose 0.5 per cent.

U.S. gross domestic product for the third quarter was revised upwards to 3.1 per cent, better than the 2.8 per cent growth economists forecast.

U.S.  jobless claims for last week rose 17,000 to 361,000. That was close to expectations.

(1000 a.m. ET) The U.S. National Association of Realtors reports on existing home sales in November. Economists expect 4.9 million annualized sales.

(1000 a.m. ET) U.S. releases its Philadelphia Fed survey. The general business conditions index is expected to have declined 2.0 per cent this month, improving from the contraction of 10.7 per cent seen last month amid Hurricane Sandy.

STOCKS TO WATCH:

IntercontinentalExchange Inc. has agreed to buy NYSE Euronext, the operator of the New York Stock Exchange, for $33.12 a share in stock and cash, or about $8.2-billion (U.S.).

Oracle has agreed to buy software company Eloqua for $23.50 per share, or about $871-million (U.S.). Oracle shares are down 0.4 per cent in the premarket; Eloqua is up 29 per cent.

Bombardier Inc. has a firm deal to sell at least 10 of its new C Series passenger jets to AirBaltic. The deal, the second major order for the C Series this week, could be worth up to $1.57-billion.

Earnings include Carnival Corp.; Cintas Corp.; ConAgra Foods Inc.; Discover Financial Services; Nike Inc.; Red Hat Inc.; Research In Motion Ltd.; and Winnebago Industries Inc.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

Even gold bull Jim Rogers is turning cautious on the metal.

How to calculate the real-world cost of currency conversions at Canadian discount brokers.

Why there's no need to panic over a pickup in insider selling in the U.S.

One of the world’s most prominent hedge funds is sitting on a $500-million profit after making a bet that Greece would not be forced to leave the euro zone.

U.S. corporate credit markets are looking extraordinarily rich.

Why 2013 could be the year of U.S. banking consolidation.

What the Fed's new policy means for bond investors.

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The premarket report is constantly updated to reflect the latest news developments and market moves. For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities

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