Before the bell: Stocks headed for another brutal selloff

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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.

It's shaping up to be another nerve-wracking day in North American markets, with stock futures this morning posting losses of around 1 per cent and WTI crude oil sinking to below $80 (U.S.) a barrel for the first time since June 2012. European stocks are seeing their eighth day of losses, with credit yields in debt-stricken Greece sharply higher after a disappointing bond auction.

Worries about the shaky trajectory of global growth that drove markets lower in extremely volatile trade on Wednesday are not abating this morning. And further fuel is being added to the fire with profit or revenue warnings from Netflix, eBay and Philip Morris - as several third-quarter earnings reports from blue chips are released in the U.S. Goldman Sachs beat earnings and revenue expectations, but its shares are down around 3 per cent in the premarket.

Selling accelerated on Wednesday upon the release of weaker-than-expected U.S. retail sales data. Today, the U.S. released stronger-than-expected jobless claims for last week - falling to their lowest level in 14 years in fact - as well as a better reading than expected on industrial production. But futures were still clinging to their lows of the morning, as market players appear to be approaching any economic data with caution right now.

Meanwhile, a number of Federal Reserve officials will also be speaking today, including an economic outlook by Philadelphia Fed President Charles Plosser this morning. Mr. Plosser once again suggested the Fed should raise interest rates "sooner rather than later" and sees healthy U.S. GDP growth of about 3 per cent through the end of this year and in 2015.

The economic outlook for the U.S. is critical at this juncture. As other key global economies - China and Europe in particular - show signs of slowing, corporate profit growth can only stay resilient if the American economy can keep growing. As the Fed soon reaches the end of its quantitative easing program, and starts to look ahead to a likely hike in interest rates next year, there's a renewed sense that the economy will have less juice from central banks to stand on. The earnings of S&P 500 companies are expected to grow 6.7 per cent in the third quarter, according to Thomson Reuters data through Wednesday, with revenue growth expected to come in at 4 per cent.

Indeed, the flight to quality is continuing this morning, with U.S. 10-year Treasury prices rising for an eighth day, the longest winning streak in two years. The yield, which moves opposite to price, sank to 1.86 per cent on Wednesday, the lowest since May 2013 - and a level few market observers had expected at this point in 2014. One upside to sinking yields: the lower interest rates could help spur growth in some sectors of the economy, such as the U.S. housing market.

Here's a closer look now at what's going at this moment.

MARKETS:

Futures:

S&P 500 -0.99 per cent; Dow -0.85 per cent; Nasdaq -1.02 per cent; S&P/TSX -1.48 per cent

Equities:

Hong Kong's Hang Seng -1.03 per cent

Shanghai composite index -0.74 per cent

Japan's Nikkei -2.23 per cent

London's FTSE 100 –2.18 per cent

Germany's DAX –2.01 per cent

France's CAC 40 –2.61 per cent

Stoxx 600 –2.36 per cent

Commodities:

WTI crude oil (Nymex Nov) –1.88 per cent at $80.18 (U.S.) a barrel

Natural gas (Nymex Jan) +0.58 per cent at $3.99 (U.S.)

Gold (Comex Dec) –0.19 per cent at $1,242.40 (U.S.) an ounce

Copper (Comex Dec) –1.60 per cent at $2.96 (U.S.) a pound

Currencies:

Canadian dollar at 88.23 (U.S.), down 0.0058

U.S. dollar index up 0.13 at 85.27

US dollar vs euro 0.7842, up 0.0040

Bonds:

U.S. 10-year Treasury yield 2.02 per cent, down 0.12

ECONOMIC INDICATORS:

Canadian manufacturing sales for August fell 3.3 per cent, worse than the fall of 2.0 per cent that was expected, and reversing from the growth of 2.5 per cent that was seen the previous month.

U.S. initial jobless claims for last week fell to 264,000, less than the 290,000 that the market was expecting and the 287,000 in claims from the previous week. It was the lowest number of jobless claims since April 2000.

U.S. industrial production for September rose 1 per cent from August, beating the expectation of 0.4 per cent growth.

(10 a.m. ET) U.S. National Association of Home Builders reveals its October housing market index. It is expected to hold steady at 59.

(10 a.m ET) Philadelphia Fed Index. Consensus is for a reading of 20.0.

STOCKS TO WATCH:

Goldman Sachs reported Q3 EPS of $4.57 (U.S.) versus expectations for $3.21. Sales rose to $8.39-billion from $6.72-billion, also above analyst forecasts of $7.82-billion. But shares are down 3 per cent in premarket trading. Goldman set aside a smaller portion of revenue to pay employees than in the first half of the year, which accounted for at least some of the beat.

Netflix slumped 25 per cent in early New York trading after reporting third-quarter subscriber growth that missed the company's forecast.

EBay forecast sales for fourth quarter fell short of expectations.

Wal-Mart slashed its forecast for this year. Shares are down 1.5 per cent in the premarket.

Delta Air Lines reported Q3 EPS of $1.20 vs. expectations for $1.18.

Philip Morris International reported Q3 EPS of $1.39 versus expectations for $1.33. But it lowered its earnings expectations for the year.

Blackstone Group reported Q3 EPS of 66 cents (U.S.) versus expectations for 71 cents.

UnitedHealth Group reported Q3 EPS of $1.63 (U.S.) versus Street expectations for $1.53.

Other earnings today include: Advanced Micro Devices; athenahealth; Baker Hughes; BB&T; Capital One Financial; Fifth Third Bancorp; Google; Marriott Vacations; Mattel; SanDisk; Schlumberger; and Sonoco Products.

U.S. drugmaker AbbVie has pulled the plug on its plan to buy Dublin-based Shire , recommending shareholders vote against the proposed $55 billion takeover following new U.S. tax rules. Shire stands to be paid a break-up fee of about $1.64 billion, assuming AbbVie's shareholders follow the advice and reject the transaction.

ANALYST ACTIONS:

Raymond James upgraded Air Canada to "market perform" from "underperform" and maintained a $7.50 (Canadian) price target.

TD Dominion Securities upgraded Precision Drilling to "action list buy" from "buy" but cut its price target to $15 (Canadian) from $19.

Macquarie downgraded Lululemon Athletica to "underperform" from "neutral" with a price target of $34 (U.S.).

Cantor Fitzgerald upgraded Cameco to "buy" from "hold" with a price target of $26.25 (Canadian).

RBC Dominion Securities upgraded Westshore Terminals to "outperform" from "sector perform" and maintained its price target at $36 (Canadian). BMO Nesbitt Burns upgraded its rating to "market perform" and maintained a $30 (Canadian) price target.

Piper Jaffray cut its price target on Netflix to $345 (U.S.) from $434 while maintaining a "neutral" rating. Jefferies upgraded Netflix to "hold" from "underperform" but cut its price target to $300 from $350. BMO dropped its price target to $375 from $400 and maintained a "market perform" rating.

RBC Dominion Securities downgraded EBay to "sector perform" from "outperform" and cut its price target to $55 (U.S.) from $62.

Merrill Lynch upgraded Time Warner to "buy" from "neutral" and raised its price target to $85 (U.S.) from $79.

FBR Capital Markets upgraded Bank of America to "outperform" from "market perform" with a price target of $20 (U.S.).

THIS MORNING'S TOP INVESTING READS ON THE WEB:

The importance of ignoring the noise of the market.

The fascinating relationship between low volatility and value.

Is your mutual fund manager showing egotistical qualities? Then it's time to move on.

The Canadian Couch Potato blog on Vanguard's latest cuts in ETF fees.

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Have feedback on our daily Before the Bell report and suggestions on how to make it more useful in your investing day? Please contact Inside the Market Editor Darcy Keith at dakeith@globeandmail.com.