(Updated with latest economic data, earnings reports and corporate news)
After the triple-digit gains in the Dow and TSX on Tuesday, this morning is looking much more cautious as traders absorb another onslaught of key U.S. earnings reports.
U.S. stock futures are flat to slightly higher, with major commodities edging up. S&P 500 futures ticked up modestly after the U.S. at 830 a.m. released surprisingly strong housing data for September, further evidence the sector is well on the way to recovery.
Tech bellwethers IBM and Intel reported after the closing bell on Tuesday. Results overall didn't impress the Street, and shares in both companies are down about 4 per cent in the premarket. On the bright side this morning, Bank of America beat expectations and its shares are up 1 per cent in the premarket.
While there have been disappointments and the earnings season is still young, so far the third quarter hasn't been quite as bad as some had feared. Of the 22 S&P 500 companies that have reported since Oct. 9, only 3, or 13.6 per cent, have missed earnings per share forecasts, according to Bespoke Investment group.
Check out the stocks and economic indicators to watch below for more of the results that are pouring in.
Meanwhile, Moody's is doing its part in keeping investors relatively upbeat. It left the sovereign-debt rating for Spain late Tuesday at investment grade. That pushed 10-year borrowing costs in the country to the lowest in more than six months, and sparked a rally in Spanish, Italian and Portuguese equities overnight. Meanwhile, the Spanish government said today that it will decide within the next few weeks whether to ask for outside financial help, noting it might opt for a precautionary line of credit instead of bailout cash.
Now, here's the rundown of what else you need to know before the trading day gets underway:
MARKETS:
Equities:
Futures: Dow +0.1 per cent, S&P 500 +0.3 per cent, Nasdaq +0.0 per cent
Hong Kong's Hang Seng index +0.99 per cent
Shanghai composite index +0.34 per cent
Japan's Nikkei +1.21 per cent
London's FTSE 100 +0.48 per cent
France's CAC 40 +0.40 per cent
Germany's DAX index +0.21 per cent
Commodities:
WTI (Nymex Dec) +0.18 per cent at $92.71 (U.S.) a barrel
Gold (Comex Dec) +0.32 per cent at $1,751.90 (U.S.) an ounce
Copper (Comex Dec) +0.32 per cent at $3.70 (U.S.) a pound
Currencies:
Canadian dollar up 0.0041, or 0.41 per cent, at $1.0179 (U.S.)
STOCKS AND ECONOMIC INDICATORS TO WATCH:
U.S. annualized housing starts for September surged 15 per cent to a four-year high of 872,000, much stronger than the 765,000 forecast by economists.
Potash Corp. is down about 2 per cent in the premarket after lowering its profit outlook for 2012 as global demand for potash continues to slide.
Celtic Exploration Ltd. has received a friendly takeover offer valued at $3.1-billion from Canadian affiliates of U.S. energy giant ExxonMobil Corp., which will expand its natural gas holdings in western Canada through the deal.
Yellow Media Inc. says it has reached a settlement to resolve a dispute over terms of a proposed debt-for-equity swap.
Penn West Petroleum has agreed in principle to sell $1.3-billion worth of its non-core properties, representing the equivalent of 12,000 barrels per day of production.
Halliburton says its third-quarter net income fell 12 per cent to 65 cents per share from 74 cents per share a year ago. Revenue rose 9 per cent to $7.11 billion. Profits and revenue are short of Wall Street expectations and shares are down 2 per cent in the premarket.
PepsiCo Inc. says its net income dipped 5 per cent in the third quarter. It stood by its guidance for the year, however, and profit came in above Wall Street expectations. Shares were flat in the premarket.
IBM said late Tuesday that earnings per share, excluding items, were $3.62 (U.S.), just beating average analysts' estimates of $3.61. Revenue eased 5 per cent to $24.7-billion. Wall Street had expected a decline in revenue by about 3 per cent to $25.36-billion. Shares are down 4 per cent in the premarket.
Intel said late Tuesday it generated income of $3-billion (U.S.), or 58 cents a share, in its latest quarter. Although that number is higher than what most analysts expected, it still represents a 14 per cent drop from the same quarter last year. Revenue also fell 5.5 per cent year-over year. Shares are down 3 per cent in the premarket.
Bank of New York Mellon posted third-quarter earnings of 61 cents a share, beating expectations for 54 cents. Shares are up 2 per cent in premarket.
Blackrock said third-quarter net earnings were $3.65 a share, beating expectations.
Other earnings to be released today include American Express and eBay.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
A monthly survey by Bank of America/Merrill Lynch showed 24 per cent of fund managers are overweight equities – the highest in six months - rising from 15 per cent in September.
High frequency traders are now targeting the natural gas market.
Want to invest like a hedge fund? Then consider this new ETF.
The best rates out there now for high-interest savings accounts, Tax-Free Savings Accounts and GICs.
In the last few days there's been a slight shift in how people are looking at China. Here's a surprising chart that somewhat flies in the face of the idea that Chinese demand for industrial commodities is collapsing.
Invesco PowerShares is set to launch a U.S. ETF this week that cherry-picks stocks that have both high dividends and low volatility.
Darcy Keith