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Premarket: Stock futures off, but RIM looks set to extend rally

Investors appear to be a little less enthusiastic about stocks this morning after five straight days of record high closings for the Dow Jones industrial average. U.S. stock futures are mildly lower after Asian markets lost ground overnight, while European stocks are mixed.

The benchmark S&P 500 index is now just 9 points, or 0.6 per cent, away from its own record high, and the longevity of the run-up in U.S. stock values has many thinking a pullback is overdue. Yet, there's little indication market players are panicking over such a prospect: the CBOE Volatility Index - the so-called fear index - on Monday hit its lowest level since February of 2007 and is down 36 per cent so far this year. That could be taken as a bearish sign, however. Historically, low volatility combined with fresh highs in the S&P 500 has often preceded a market downturn.

The backdrop today isn't particularly supportive for stocks. New data this morning showed U.K. industrial production falling 1.2 per cent in January from December, disappointing economists who were expecting a rise of 0.1 per cent. In Asia, the Japanese yen strengthened and the Nikkei fell after a government opposition member said he would oppose the nomination of Kikuo Iwata as deputy governor of the central bank, throwing some doubt into whether the strong supporter of greater monetary stimulus would get the job.

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Based on premarket action so far, the S&P/TSX composite index will once again get some support from gains in Research In Motion Ltd.

More on that, and what else is going on this morning, below.

MARKETS:

Equities:

U.S. futures: S&P 500 -0.1 per cent; Dow -0.2 per cent; Nasdaq -0.2 per cent

Hong Kong's Hang Seng index -0.87 per cent

Shanghai composite index -1.02 per cent

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Japan's Nikkei -0.28 per cent

London's FTSE 100 +0.02 per cent

Germany's DAX -0.13 per cent

France's CAC 40 -0.11 per cent

Italy's FTSE MIB +0.35 per cent

Commodities:

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WTI (Nymex Apr) -0.24 per cent at $92.30 (U.S.) a barrel

Gold (Comex Apr) +0.27 per cent at $1,582.30 (U.S.) an ounce

Copper (Comex May) -0.28 per cent at $3.51 (U.S.) a pound

Currencies:

Canadian dollar down 0.0014, or 0.14 per cent, at $0.9727 (U.S.)

ECONOMIC INDICATORS TO WATCH:

No major North American reports scheduled.

STOCKS TO WATCH:

Research In Motion Ltd. shares are up 2.3 per cent in the premarket and look set to extend Monday's rally that was inspired by fresh takeover speculation and news it will start selling the new BlackBerry Z10 smartphone in the U.S. on March 22. The speculation was sparked by a comment from the head of China's Lenovo Group Ltd., who said it might consider such an acquisition in the future.

Apple Inc. shares are down 0.8 per cent in the premarket after Jefferies analyst Peter Misek slashed his price target on the tech company to $420 (U.S.) from $500. His latest supplier checks pointed to continued weakness in iPhone sales and he sees a 25 per cent chance Apple will miss its guidance for the first quarter.

Talisman Energy Inc. has struck a deal to scrap the platform at its troubled Yme oil project in the Norwegian North Sea.

Leon's Furniture Ltd. and The Brick Ltd. said a key hurdle has been overcome in The Brick's plan to take over its rival and the deal is now expected to close on March 28.

Costco Wholesale Corp. shares are up 1 per cent in the premarket after its latest earnings beat Street estimates, although its revenues fell a little short.

Yum Brands Inc. was up 6 per cent in the premarket after the restaurant chain owner said first-quarter same-store sales were down less than estimated.

Other earnings today include: Aecon Group Inc.; Alarmforce Industries Inc.; Embraer SA; and Empire Co. Ltd.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

Heavy sales of gold held by exchange traded products continued into March.

How the top five asset allocators have placed their bets for 2013.

U.S. ETFs are now coming to market that blend two big themes in today's market: dividends and low-volatility investing.

Corn prices may take a drubbing this year.

Apple's technical chart is so bad, that it's good. It may help that the stock could be at the point of capitulation.

Howard Marks, a Wall Street guru followed closely by Warren Buffett and who has made a killing on distressed debt, thinks the bond bubble is only in the "fifth inning."

Barron's thinks Bed Bath & Beyond could attract Warren Buffett, given its strong profits and steady growth.

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The premarket report is constantly updated to reflect the latest news developments and market moves. For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities

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About the Author
Investment Editor

Darcy Keith is The Globe and Mail's Investment Editor. He has been a business journalist since 1992 and joined the Report on Business in 2010 from Yahoo! Canada, where he was the senior editor of finance. More

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