The Before the Bell report is constantly updated to reflect the latest news developments and market moves in the premarket. Check back later for updates.
Shares in BlackBerry plunged in the U.S. premarket after the Globe and Mail reported sources as saying the company is abandoning a plan to find a buyer and will instead raise $1-billion of new funds and replace its chief executive and some directors. The stock was later halted as the company issued a press release confirming the Globe report; shares have now resumed trading in the U.S. premarket and are down 16 per cent.
BlackBerry said Fairfax Financial Holdings and other institutional investors will invest in BlackBerry through a U.S. $1-billion private placement of convertible debentures, of which Fairfax will acquire U.S. $250-million. The transaction is expected to be completed within the next two weeks.
Under the terms of the transaction, the purchasers will subscribe for $1-billion of 6 per cent unsecured subordinated convertible debentures convertible into common shares of BlackBerry at a price of $10 (U.S.) per common share, a 28.7 per cent premium to the closing price of BlackBerry common shares on Friday.
John Chen, the former chief of Sybase Inc., will be appointed executive chair of BlackBerry's board and will be responsible for the strategic direction of BlackBerry. Prem Watsa, chairman and CEO of Fairfax, will be appointed lead director and chair of the compensation, nomination and governance committee and Thorsten Heins, the current CEO, and David Kerr intend to resign from the board at closing.
Today had been the deadline for Fairfax Financial to conclude its due diligence on its $4.7-billion (U.S.) takeover proposal, which required financing.
For the broader market, U.S. and Canadian stock futures are up modestly this morning, pointing to some cautious early gains as another market week filled with Federal Reserve bond tapering speculation gets underway.
The U.S. will release its non-farm payrolls report for October at the end of this week, which is bound to ignite fresh talk on when the Fed will begin to scale back its so-called quantitative easing program. Most believe that tapering process will have to wait until early 2014 given the still sluggish recovery and another round of tumultuous fiscal budget negotiations that looms in the US. Yet, the Fed in its rate-decision comments last week appeared to leave the door open to begin some tapering as early as December.
Traders today are looking for more hints as several Federal Reserve officials speak, including St. Louis Fed President James Bullard and Boston Fed President Eric Rosengren - both of which are voting members of the Fed. Mr. Bullard told CNBC this morning that the central bank doesn't have to be in a "hurry" to pare its $85-billion-a-month asset buying program because inflation is low, adding that he wants to see evidence that inflation is rising to 2 per cent before any tapering. Stock futures ticked up after he gave the television interview.
Overseas markets were relatively quiet overnight amid little in the way of major news.
Now, here's a closer look at what's going on this morning and what to look for later today.
MARKETS:
Equities:
Futures: S&P 500 +0.34 per cent; Dow +0.33 per cent; Nasdaq +0.48 per cent; S&P Toronto +0.13 per cent
Hong Kong's Hang Seng -0.26 per cent
Shanghai composite index +0.02 per cent
Japan's Nikkei Closed for holiday
London's FTSE 100 +0.46 per cent
Germany's DAX +0.33 per cent
France's CAC 40 +0.25 per cent
Commodities:
WTI crude oil (Nymex Dec) -0.38 per cent at $94.25 (U.S.) a barrel
Gold (Comex Dec) +0.49 per cent at $1,319.60 (U.S.) an ounce
Copper (Comex Dec) -0.61 per cent at $3.28 (U.S.) a pound
Currencies:
Canadian dollar at 96.13 (U.S.), vs. 95.90 at Friday's North American close.
U.S. dollar index down 0.12 at 80.58
Bonds:
U.S. 10-year Treasury yield 2.62 per cent, down 0.02
ECONOMIC INDICATORS TO WATCH:
(10 a.m. ET) U.S. releases factory orders for August, forecast to rise 0.3 per cent after falling 2.4 per cent in July, with the decline centred on aircraft.
STOCKS TO WATCH:
Twitter has raised its IPO pricing range to $23 (U.S.) to $25 per share.
Lululemon Athletica, which suffered an embarrassing recall of overly sheer yoga pants last spring, is fielding what it calls a small number of complaints over the quality of some of its pants.
Shares in Barrick Gold are up 0.7 per cent in the premarket. Major Barrick shareholders are boycotting a huge $3-billion (U.S.) stock offering announced last week, demanding that the company speed up the pace of change on its board.
Pacific Rubiales Energy Corp. has received Colombian environmental licences for two exploration and development blocks that are strategically important to the Toronto-based company.
Weyerhaeuser is selling its homebuilding division to Tri Pointe Homes Inc in a $2.7-billion (U.S.) deal that will leave Weyerhaeuser shareholders in control of one of the 10 largest homebuilders in the United States.
CME Group reported third-quarter adjusted earnings per share of 75 cents, above the Street consensus of 73 cents.
Kellogg third-quarter adjusted EPS was 95 cents US vs. the 89 cents Street estimate.
Other earnings today include: Bauer, Dundee, Office Depot, NuVista, Toromont, Uranium One, Marathon Oil, Anadarko Petroleum.
ANALYST ACTIONS:
Canaccord Genuity upgraded Manitoba Telecom to "hold" from "sell" and reiterated $30 (Canadian) price target.
Canaccord downgraded First Capital Realty to "hold" from Buy" but raised its target to $18.30 (Canadian) from $17.15.
Canaccord downgraded Fortis to "hold" from "buy" and cut its price target to $34 (Canadian) from $35.
Canaccord cut its price target on Barrick Gold to $20.50 from $21.50 and maintained a "hold" rating.
Canaccord raised its price target on Canadian Tire to $109 (Canadian) from $99 and maintained a "buy" rating.
Canaccord added Goldcorp to its "focus list" - its best investing ideas. It kept a $35.50 (Canadian) price target.
Goldman Sachs upgraded the U.S. steel sector to "neutral" from "cautious," believing the industry could see a recovery in coming years and that oversupply risks are priced in. AK Steel Holding was upgraded to "buy" with a $6 price target; United States Steel was upgraded to "buy" with a $30 price target; Steel Dynamics was upgraded to "buy" with a $22 price target; and Reliance Steel & Aluminum was downgraded to "neutral" with a $82 price target.
Barclays upgraded Occidental Petroleum to "overweight" from "equalweight" and raised its price target to $108 (U.S.) from $93.
Goldman Sachs downgraded Gap to "neutral" from "buy" and cut its price target to $40 (U.S.) from $42.
Atlantic Equities initiated coverage on Twitter with an "overweight" rating and $34 (U.S.) price target.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
The reality is that very few of the conditions that normally precede a major correction are actually in place at this time.
PIMCO's Enhanced Short Maturity ETF has taken the top spot in the ranks of active ETFs.
Despite arguments from bulls, equities aren't really all that cheap compared to fixed income.
A seasonality breakdown for the month of November.
In the real world, being the cheapest ETF doesn't make it the best.
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For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities.
Darcy Keith