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Before the bell: Stocks rise as U.S. bank profits beat Street Add to ...

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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.

Global stock markets are mixed this morning, but building upwards momentum ahead of the opening bell on Wall Street after two U.S. banking giants blew past Street forecasts in reporting second-quarter earnings.

U.S. and Canadian stock futures are up around 0.1 per cent after earlier dipping slightly in the red, getting lift from better-than-expected earnings out of JPMorgan and Goldman Sachs. The results should boost the entire U.S. financial sector later today. Consumer staples giant Johnson & Johnson also beat Street forecasts in its earnings reported in the premarket, increasing the market's confidence level that the second-quarter was a healthy one for the U.S. corporate sector.

Asian indexes closed mostly higher overnight, basking in the glow of the renewed confidence on Wall Street Monday that saw the Dow rise more than 100 points to reclaim the 17,000 level. But it was a different story in Europe, where Germany's ZEW economic sentiment indicator came in at 27.1 in July, falling from 29.8 in June, and below economists' expectations - heightening concerns about the stagnation of the German economy. European indexes were decisively lower earlier today but are clawing back after the positive U.S. banking earnings.

Meanwhile, a surprise jump in British inflation in June sent the British pound higher. The 1.9 per cent reading was the highest since January, picking up from May’s 1.5 per cent, a 4-1/2-year low.

The main market event of the day is likely to be Federal Reserve Chair Janet Yellen's monetary policy report to the Senate Banking Committee. This is the first of two days of testimony from Ms. Yellen, and traders will be closely watching for any hints on when monetary policy could be tightened. She's expected to present an optimistic outlook on the economy, but play down prospects of any hikes in interest rates until well into the future, even while recent data suggest significant improvement in the labour market. 

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

MARKETS:

Equities:

Futures: S&P 500 +0.04 per cent; Dow +0.12 per cent; Nasdaq +0.13 per cent; S&P/TSX +0.14 per cent

Hong Kong's Hang Seng +0.49 per cent

Shanghai composite index +0.16 per cent

Japan's Nikkei +0.64 per cent

London’s FTSE 100 +0.03 per cent

Germany’s DAX -0.12 per cent

France's CAC 40 -0.21 per cent

Commodities:

WTI crude oil (Nymex Sep) -0.72 per cent at $99.76 (U.S.) a barrel

Gold (Comex Aug) +0.39 per cent at $1,311.80 (U.S.) an ounce

Copper (Comex Sep) -0.15 per cent at $3.24 (U.S.) a pound

Currencies:

Canadian dollar at 93.17 (U.S.), down 0.0019

U.S. dollar index up 0.04 at 80.22

Bonds:

U.S. 10-year Treasury yield 2.54 per cent, down 0.01

ECONOMIC INDICATORS:

U.S. retail sales for June rose 0.2 per cent from May, below Street estimates of 0.6 per cent.

Canada's existing home sales for June rose 0.8 per cent from May, well below May's 5.9 per cent jump from April.

Average Canadian home sale prices rose 6.9 per cent in June from a year earlier, according to the Canadian Real Estate Association.

(10 a.m. ET) Fed Chair Janet Yellen will deliver her monetary policy report to the Senate Banking Committee. Day one of two.

STOCKS TO WATCH:

Sprott Resources has been halted pending news. Petroamerica Oil has also been halted pending news.

JPMorgan shares are up 1.6 per cent in the premarket after reporting second-quarter EPS of $1.46 (U.S.), above expectations of $1.31.

Goldman Sachs shares are up 2.4 per cent in the premarket after reporting second-quarter EPS of $4.10 (U.S.), ahead of expectations of $3.09.

Johnson & Johnson reported second-quarter EPS of $1.66 (U.S.), beat the Street consensus of $1.55. Shares are up 0.2 per cent in the premarket.

Other earnings today include: Intel, J.B. Hunt Transport, Yahoo.

Reynolds American has agreed to acquire Lorillard in a transaction valued at $27.4-billion (U.S.).

Bombardier Aerospace is extending its relationship with Horizon Air Industries Inc. of Seattle after the airline ordered one Q400 NextGen turboprop airliner, worth US$32.6 million, and signed a five-year heavy maintenance agreement.

ANALYST ACTIONS:

Credit Suisse upgraded Parex Resources to "outperform" from "neutral" and hiked its price target to $18.50 (Canadian) from $13.

RBC upgraded AutoCanada to "outperform" from "sector perform" and hiked its price target to $92 (Canadian) from $91.

Raymond James upgraded Methanex to "strong buy" from "market perform" and raised its price target to $80 (U.S.) from $75.

Raymond James downgraded Canfor Pulp to "outperform" from "strong buy" and maintained a $17 (Canadian) price target.

Susquehanna raised its price target on Apple to $115 (U.S.) from $104 and maintained a "positive" rating.

Goldman Sachs downgraded Kellogg to "sell" from "neutral" and cut its price target to $59 (U.S.) from $64.

Evercore Partners downgraded Time Warner to "equal weight" from "overweight" with a price target of $75 (U.S.).

THIS MORNING'S TOP INVESTING LINKS:

Why we are seeing the start of a 'good' stock market mania.

Could a Yahoo-AOL merger be in the making?

Amazon's drone delivery spectacle isn't really about drones.

On the wisdom of investing in emerging markets debt right now.

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For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities.

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