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Inside the Market

Premarket: Stocks head for losses, but Facebook shares surge Add to ...

Traders are in profit-taking mode this morning, with Canadian and U.S. stock futures pointing to a weaker opening and global markets uniformly moving lower.

Commodities are also sliding - another headwind for the resource-rich TSX - and long-term U.S. bond yields are trending higher again.

Other than corporate earnings, there's not a lot of fresh news to account for the weaker sentiment. But worries about the global economy persist - especially after Caterpillar's downbeat world economic outlook on Wednesday. There were some disappointing earnings reports out of Asia this morning as well, putting pressure on stock values there.

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The big focus today in North America is on earnings - and today is one of the busiest of the second-quarter reporting season. Facebook set a positive tone late Wednesday in reporting much better-than-expected earnings, sending its stock surging in extended trading. Its big rally is also responsible for lifting Nasdaq futures this morning.

And overall, things aren't shaping up too badly for the second quarter in the U.S., with 74 per cent of S&P 500 firms beating Street profit estimates, according to Bloomberg. Only 58 per cent surpassed sales projections, however, an indication of how it's much harder to grow the top line, which can't be bolstered through cost cuts and other profit-boosting measures.

Now, here's a closer look at what's going on and what's to come later today.

MARKETS:

Equities:

Futures: S&P 500 -0.45 per cent; Dow -0.47 per cent; Nasdaq +0.06 per cent; S&P Toronto -0.21 per cent

Hong Kong's Hang Seng -0.31 per cent

Shanghai composite index -0.61 per cent

Japan's Nikkei -1.14 per cent

London’s FTSE 100 -1.03 per cent

Germany’s DAX -1.19 per cent

France's CAC 40 -0.95 per cent

Commodities:

WTI crude oil (Nymex Sep) -0.79 per cent at $104.56 (U.S.) a barrel

Gold (Comex Dec) -0.4 per cent at $1,314.20 (U.S.) an ounce

Copper (Comex Sep) -0.8 per cent at $3.15 (U.S.) a pound

Currencies:

Canadian dollar at 97.10 (U.S.), versus 96.94 at Tuesday's North American close.

U.S. dollar index down 0.05 at 82.23

Bonds:

U.S. 10-year Treasury yield 2.58 per cent, up 0.07

ECONOMIC INDICATORS TO WATCH:

U.S. Commerce Department said durable goods orders for June rose 4.2 per cent, much higher than the 1 per cent rise that was forecast by economists.

U.S. jobless claims for last week rose 7,000 to 343,000, a little higher than the 341,000 that was forecast.

STOCKS TO WATCH:

Facebook shares are up 23 per cent in the premarket after the company blew past analysts' expectations for the second quarter. There's been at least one analyst upgrade so far: BTIG raised its rating to neutral from sell and removed a $22 price target.

General Motors reported second-quarter earnings per share of 84 cents versus the 75 cents analyst estimate. Sales also topped estimates. Shares are up 1.7 per cent in the premarket.

Potash Corp of Saskatchewan reported a lower-than-expected quarterly profit and cut its outlook as prices of its crop nutrients fell. Shares are down 3 per cent in the premarket.

Teck Corp. reported second-quarter profit of 34 cents a share, 3 cents better than analysts' estimates.

Goldcorp reported second-quarter adjusted earnings per share of 14 cents, missing the 22 cents estimate. Shares are down 1.8 per cent in the premarket.

Colgate-Palmolive Co. said profit fell to 60 per share from 65 cents per share a year earlier. Sales rose 1.9 per cent to $4.35-billion, below the $4.39-billion analysts expected. It lowered its 2013 earnings forecast as Latin American sales slipped.

PulteGroup Inc. reported a 14 per cent drop in second-quarter earnings as higher costs at the home builder offset the benefit of stronger closings and selling prices. Shares are down 8 per cent in the premarket.

Standard & Poor’s owner McGraw Hill Financial Inc posted an 18 per cent rise in quarterly profit as it earned more from its ratings agency and its Dow Jones indices.

Satellite radio provider Sirius XM Radio Inc posted second-quarter revenue Thursday that beat estimates, as it added more than 700,000 subscribers. Shares are up nearly 2 per cent in the premarket.

Other earnings today include: 3M Co.; Amazon.com Inc.; Cliffs Natural Resources Inc.; Domtar Corp.; Dow Chemical Co.; D.R. Horton Inc.; Embraer S/A ADS; Expedia Inc.; Goldcorp Inc.; Harley-Davidson Inc.; Hershey Co.; Husky Energy; IMAX Corp.; Legg Mason Inc.; Newmont Mining Corp.; Precision Drilling; Southwest Airlines Co.; Starbucks Corp.; Xerox Corp.; and Zynga Inc.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

Proof for why you should add multiple asset classes to your portfolio.

Some troublesome signs emerge in the Dow Jones transportation average.

Charts suggest copper is ready for a bounce.

The difference between index tracking and premiums/discounts is key to understanding how ETFs work.

The S&P 500 forward earnings is at a record high.

Why it's a smart strategy to keep investing as simple as possible.

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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. You can also be notified using our dashboard feature when new articles appear from this author. Read more on using this feature here.

 
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