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Before the bell: Stocks rise; gold takes surprise dip

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.

Stock futures are on the rise and are pointing to a modest recovery in North American markets this morning after the major indexes - especially Nasdaq - tumbled Tuesday on continued jitters about the budget impasse in Washington.

Sentiment is getting a boost by word late Tuesday that Janet Yellen, known for her supportive stance on economic stimulus measures, is expected to be named chair of the Federal Reserve. President Barack Obama is scheduled to nominate Ms. Yellen to replace Ben Bernanke at a 3 p.m. (ET) ceremony at the White House today. Mr. Bernanke's term expires Jan. 31.

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Ms. Yellen is currently vice-chairman of the Fed and is considered a "dove" who will likely continue to support asset purchases and loose monetary policy, instead of focusing strictly on fighting inflation. As such, market participants are gaining even more confidence that the Fed will hold off until at least December to announce any tapering of its $85-billion-a-month in asset purchases.

Her nomination was widely predicted after former Treasury Secretary Lawrence Summers recently dropped out of the race for Fed chairman, so markets haven't had a sharp reaction to the news. Meanwhile, there continues to be little progress in resolving the budget impasse in Washington that has furloughed thousands of workers and has raised the frightening possibility of the U.S. defaulting on its debt if a deal isn't reached on raising its borrowing limit later this month.

Mr. Obama continues to insist that he won't talk to his political opponents until they agree to measures to raise the debt ceiling. House Speaker John Boehner is chastising Mr. Obama for demanding "unconditional surrender" from Republicans.

The Fed will be releasing minutes from its last policy meeting this afternoon, which will provide some insight on why it chose to leave its monthly bond buying program unchanged for now. But the minutes might be largely academic at this point, given the serious threat that the battle on Capitol Hill now poses to the global economy.

Gold bugs won't take comfort this morning. The precious metal is down about 1 per cent, even though Ms. Yellen's nomination could be perceived as bullish for gold, given that the metal can be a hedge against inflation, which can be triggered by the easy monetary policies she favours.

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

MARKETS:

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Equities:

Futures: S&P 500 +0.32 per cent; Dow +0.24 per cent; Nasdaq +0.29 per cent; S&P Toronto +0.39 per cent

Hong Kong's Hang Seng -0.62 per cent

Shanghai composite index +0.63 per cent

Japan's Nikkei +1.03 per cent

London's FTSE 100 -0.08 per cent

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Germany's DAX +0.16 per cent

France's CAC 40 +0.52 per cent

Commodities:

WTI crude oil (Nymex Dec) -0.009 per cent at $103.30 (U.S.) a barrel

Gold (Comex Dec) -1.33 per cent at $1,306.70 (U.S.) an ounce

Copper (Comex Dec) -0.52 per cent at $3.28 (U.S.) a pound

Currencies:

Canadian dollar at 96.40 (U.S.), down 0.0005 from Tuesday's North American close.

U.S. dollar index up 0.27 at 80.33

Bonds:

U.S. 10-year Treasury yield 2.62 per cent, down 0.01

ECONOMIC INDICATORS TO WATCH:

(2 p.m. ET) FOMC releases minutes from its latest policy meeting.

STOCKS TO WATCH:

Jean Coutu Group (PJC) Inc. said it plans to distribute up to $502-million to shareholders through a share buyback program as well as a one-time dividend of 50 cents. It also reported a big increase in its latest quarterly earnings.

The Wall Street Journal is reporting that Jos A. Bank Clothiers Inc. has approached Men's Wearhouse Inc. about combining the two companies. Shares in Men's Wearhouse are up 28 per cent in the premarket and Jos. Al. Bank is up 11 per cent, even though Men's Wearhouse management has rejected the offer.

Costco Wholesale Corp posted a 1 per cent rise in quarterly profit and a 3 per cent increase in its same-store sales for the month of September. But its EPS of $1.40 a share was below Street forecasts for $1.46 and shares are down 1.5 per cent in the premarket.

Wi-Lan Inc. said it and BlackBerry Ltd. struck a deal to dismiss all pending patent litigation between the companies. Terms were not disclosed.

Alcoa Inc. shares are up 3 per cent in the premarket after it reported better-than-expected earnings late Tuesday. It also reiterated an earlier forecast that global demand for aluminum will rise 7 per cent this year.

Yum Brands Inc. shares are down 7 per cent in the premarket after the operator of KFC and Taco Bell cut its outlook for the year because of soft sales in China.

Other earnings today include: DragonWave Inc.; Novagold Resources; Velan Inc.; Adtran Inc.; Family Dollar Stores Inc.; VOXX International Corp.; Zep Inc.

ANALYST ACTIONS:

Desjardins Securities raised its price target on Bombardier to $7 (Canadian) from $6 and maintained a "buy" rating.

Desjardins Securities raised its price target on Stella-Jones to $104 (Canadian) from $100 and reiterated a "hold" rating.

Canaccord Genuity raised its price target on Exfo Inc. to $5 (Canadian) from $4.50 and maintained a "hold" rating.

Piper Jaffray upgraded Michael Kors Holdings to "overweight" from "neutral" and raised its price target to $90 (U.S.) from $73.

Piper Jaffray downgraded Ralph Lauren to "neutral" from "overweight" and cut its price target to $170 (U.S.) from $200.

Credit Suisse upgraded EOG Resources to "outperform" from "neutral" and raised its price target to $210 (U.S.) from $175.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

If you believe in numerology, you better prepare for a market crash today.

U.S. economic confidence has posted its fastest drop since the 2008 crisis.

There are other things working against the market other than the stalemate in Washington. And one of them is a break down in market breadth.

Nobody believes the country will actually exceed the debt limit — which is exactly why it might.

The 106 finance people you need to follow on Twitter.

A lonely U.S. housing bear predicts a big tumble.

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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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