(Updated with the latest premarket stock and index data and earnings results)
Canadian energy stocks are about to get whacked after Ottawa stunned the oil patch Friday night by rejecting Petronas' $6-billion proposed takeover of Progress Energy Resources.
Some suggest Progress shares could plunge as much as 30 per cent, but much of the energy sector is expected to come under pressure given thoughts that the scotched deal may mean potential takeovers of other companies are now unlikely.
Particularly vulnerable is Nexen, which is subject to a $15.1-billion takeover offer from Chinese oil group CNOOC. This morning, its U.S.-listed shares were initially down about 15 per cent in the premarket but have partially recovered, now down about 7 per cent.
Other stocks to keep a close eye on as North American trading begins are Celtic Exploration, which last week received a $2.6-billion takeover offer from Exxon Mobil in a deal that also needs approval from Investment Canada. And then there's Encana, whose depressed shares had analysts speculating last week it could become the next takeover target. Its shares are down about 3 per cent in the premarket.
The good news for investors, however, is that the backdrop to today's trading is looking quite bullish after the Dow's plunge on Friday. U.S. stock futures are slightly higher, but came off their highs this morning after Caterpillar cuts its guidance for the second time this year, citing a weakening global economy.
There are no major economic releases today, but certainly lots of corporate earnings, which we highlight below in our Stocks to Watch section. In the coming week, more than 150 of the S&P 500 are revealing their third-quarters after a pretty lacklustre earnings season so far.
Now, here's the rundown of what else you need to know before the trading day gets underway:
MARKETS:
Equities:
Futures: Dow +0.01 per cent, S&P 500 +0.02 per cent, Nasdaq +0.03 per cent
Hong Kong's Hang Seng index +0.68 per cent
Shanghai composite index +0.22 per cent
Japan's Nikkei +0.09 per cent
London's FTSE 100 -0.09 per cent
France's CAC 40 -0.02 per cent
Germany's DAX index -0.23 per cent
Commodities:
WTI (Nymex Dec) +0.09 per cent at $90.52 (U.S.) a barrel
Gold (Comex Dec) +0.09 per cent at $1,725.60 (U.S.) an ounce
Copper (Comex Dec) -0.15 per cent at $3.63 (U.S.) a pound
Currencies:
Canadian dollar down 0.0027, or 0.27 per cent, at $1.0040 (U.S.)
STOCKS TO WATCH:
Caterpillar cut its 2012 earnings per share view to $9 to $9.25 from about $9.60, although it modestly beat analysts expectations for the third quarter. It said the economy is slowing faster than it expected. Shares are down 1.5 per cent in the premarket.
Hasbro reported adjusted third-quarter earnings of $1.28 (U.S.), beating forecasts of $1.20.
Freeport-McMoRan Copper & Gold said third-quarter profit fell to 86 cents per share from $1.10 per share in the same quarter of 2011. Shares are up nearly 1 per cent in the premarket.
Other earnings out today include Canadian National Railway, Canfor Pulp Products, Texas Instruments, and Yahoo.
Ancestry.com is being bought by Permira at $32 a share. Its shares are up 8 per cent in the premarket.
BP is selling 50 per cent of TNK-BP to OAO Rosneft.
Agrium said its board plans to double its annual dividend payment.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
For investors, what's important is changes in interest rates - not which American political party passes through the White House gates.
The U.S. stock market (and U.S. Treasuries) are expensive by historical standards. What investors should do to reduce risks of mediocre returns.
Seven sins that individual investors keep committing.
Low real interest rates are usually bad news for equity markets.
Yahoo's new CEO, Marissa Mayer, is homing in on technology, not media, in her comeback plans.
Technology-sector ETFs have been on a tear this year, outpacing the S&P 500 index with double-digit gains, but that upward trend seems to be running low on steam, and many investors are reallocating assets into other sectors such as financials.
After languishing well below $100 (U.S.) for much of August and September, spot iron ore is back in rallying mode. Some reasons why, and what it says about a possible rebound in the Chinese economy.
Darcy Keith