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.
The negative handoff from Wall Street Tuesday - with the Dow suffering its worst fall in more than a month - sent Asian markets lower today and the weak tone is continuing to be seen in European equities this morning.
U.S. and Canadian stock futures, nearly unchanged earlier this morning, are also now dipping into the red. The culprit: Economic reports out of the U.S. this morning were not encouraging. A third reading on gross domestic product showed an annualized contraction of 2.9 per cent, much worse than earlier readings. The polar vortex will no doubt be blamed, but the severity of the economic dip during the three-month period is igniting speculation that weather was not the only factor to blame for what turned out to be a very weak economy to start the year. Durable goods orders for May also came in weaker than expected today, although the details of the report still showed some underlying strength.
Escalating violence in Iraq continues to curb the risk appetite for stocks. U.S. officials say insurgents are firming their hold on parts of Iraq, and there are reports this morning that Syrian air raids inside the country's borders have killed at least 50 people. So far, there have been few signs that the country's leadership is responding to pressure by foreign leaders to reform government in an attempt to stem the Sunni insurgency.
Also on the geopolitical front, the Obama administration has drawn up plans to increase sanctions against Russia by targeting its financial, energy and defense industries.
Now, here's a closer look at what's going on this morning and what is still to come today.
MARKETS:
Equities:
Futures: S&P 500 -0.18 per cent; Dow -0.21 per cent; Nasdaq -0.19; S&P/TSX -0.01 per cent
Hong Kong's Hang Seng -0.06 per cent
Shanghai composite index -0.39 per cent
Japan's Nikkei -0.71 per cent
London's FTSE 100 -0.84 per cent
Germany's DAX -0.71 per cent
France's CAC 40 -1.16 per cent
Commodities:
WTI crude oil (Nymex Aug) +0.14 per cent at $106.18 (U.S.) a barrel
Gold (Comex Aug) -0.32 per cent at $1,317.10 (U.S.) an ounce
Copper (Comex Sep) -0.54 per cent at $3.13 (U.S.) a pound
Currencies:
Canadian dollar at 93.11 (U.S.), up 0.0004
U.S. dollar index down 0.20 at 80.12
Bonds:
U.S. 10-year Treasury yield 2.55 per cent, down 0.04
ECONOMIC INDICATORS:
The third reading of U.S. first-quarter GDP showed an annualized contraction of 2.9 per cent, much weaker than the consensus expectation of 1.8 per cent and the fastest rate of decline since early 2009. The revision was largely due to a downgrade of consumer spending for the quarter.
U.S. durable goods orders fell a seasonally adjusted 1 per cent in May versus market expectations for 0.3 per cent growth. Outside the volatile transportation segment, demand for long-lasting goods declined a modest 0.1 per cent. And excluding defense, durable goods orders rose 0.6 per cent.
STOCKS TO WATCH:
Methanex announced that its joint venture operation in Egypt has been idled temporarily due to gas availability. Gas deliveries are not likely to resume until the end of July. Its U.S.-listed shares are down 2.5 per cent in the premarket.
Barnes & Noble Inc. said its board has authorized the company to pursue a split of its retail and Nook businesses into two separate public companies. Its shares are up almost 10 per cent in premarket trading.
Google will host its annual developers conference in San Francisco.
General Mills reported Q4 EPS of 67 cents, missing the Street call for 72 cents. Revenue also missed the consensus, and the company announced it is looking for fresh cost cuts. Shares are down about 2 per cent in premarket trading.
Monsanto earned $1.62 per share in the three months ended May 31, beating the $1.54 consensus expectation. The company raised the lower end of its per-share earnings estimate for the year by a dime and now expects a profit of $5.10 to $5.20.
Other earnings today include: Bed Bath & Beyond and Exfo.
ANALYST ACTIONS:
Merrill Lynch raised its price targets on several U.S. and Canadian railway stocks by an average of 9 per cent, citing strong earnings growth. The price target for Canadian National Railway rose to $67 (U.S.) from $62; and for Canadian Pacific Railway to $202 (U.S.) from $180.
National Bank Financial downgraded AGF Management to "sector perform" and cut its price target to $13 (Canadian) from $14.
RBC Dominion Securities downgraded Morguard to "sector perform" but hiked its price target to $165 (Canadian) from $150.
Canaccord Genuity downgraded Crown Point Energy to "hold" from "speculative buy" and cut its price target to 50 cents (Canadian) from $1.50.
Barclays started coverage on Intact Financial with an "overweight" rating and $80 (Canadian) price target.
Merrill Lynch downgraded Coach to "underperform" from "neutral" and cut its price target to $31 (U.S.) from $38.
KeyBanc downgraded Harley-Davidson to "hold" from "buy" and removed its $80 (U.S.) price target.
THIS MORNING'S TOP INVESTING LINKS:
Why this could be the beginning of the end of the bull market.
Wall Street's biggest bull is calling for a correction.
Why the latest gold euphoria won't last.
Three best stock picks for the drone revolution.
Cambria founder Mebane Faber on why market-cap weighting falls short.
The U.S. energy sector is way overbought.
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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