OVERNIGHT MARKETS AND NEWS

June E-mini S&Ps (ESM15 -0.83%) this morning are down -0.70% and European stocks are down -1.82% as a rout in global government bond markets undercuts equity prices. Stocks bounced from their worst levels on increased M&A activity after Verizon said it will buy AOL for $4.4 billion. The 10-year German bund yield jumped 10 bp to 0.715% and the U.S. 10-year T-note yield rose 8 bp to 2.35%, the highest in 5-1/2 months, after Goldman Sachs warned that "long-dated bonds remain a poor investment." Stocks and bonds were also pressured by comments from New York Fed President Dudley who said that the Fed's first rate increase since 2006 will usher in a "regime shift" that will stir financial markets when it occurs. Japan's 10-year bond yield jumped 6 bp to a 2-month high of 0.45% after a Japanese auction of 10-year bonds drew a bid-to-cover ratio of 2.24, the lowest in 6 years and a sign of weak demand. Asian stocks closed mixed: Japan +0.02%, Hong Kong -1.12%, China +1.56%, Taiwan +0.18%, Australia +0.88%, Singapore-0.82%, South Korea -0.03%, India -2.29%.

Commodity prices are mostly higher with a weaker dollar. Jun crude oil (CLM15 +1.86%) is up +1.69% and Jun gasoline (RBM15 +1.99%) is up +1.95%. Metals prices are higher. Jun gold (GCM15 +0.90%) is up +0.88%. Jul copper (HGN15 +1.27%) is up +1.12%. Agriculture prices are lower ahead of today's USDA WASDE crop production report.

The dollar index (DXY00 -0.66%) is down -0.69%. EUR/USD (^EURUSD) is up +0.86% on optimism that a Greek debt deal can be reached. USD/JPY (^USDJPY) is down -0.09%. GBP/USD rose +0.58% to a 4-3/4 month high after UK Mar industrial production rose more than expected.

Jun T-note prices (ZNM15 -0.52%) are down -12.5 ticks at a 4-1/4 month nearest-futures low.

Speaking today at a panel discussion in Zurich, New York Fed President Dudley said that although the timing is uncertain, the Fed's first rate increase since 2006 will usher in a "regime shift" that will stir financial markets when it occurs.

Greece made its 750 million-euro payment due to the IMF today and Greek Finance Minister Varoufakis assured the other Eurozone finance ministers that his country is serious in trying to win additional bailout funds. Dutch Finance Minister Dijsselbloem, leader of the Eurozone finance ministers, said after Monday's negotiations that "we are making faster progress."

U.S. STOCK PREVIEW

Key U.S. reports today include: Mar JOLTS job openings (expected -25,000 to 5.108 million after Feb's +168,000 to 5.133 million), (2) the April Treasury monthly budget statement (expected +$155.0 billion after March's -$52.91 billion), (3) a speech by San Francisco Fed President John Williams at the New York Association for Business Economics Harvard Club, and (4) the Treasury's auction of $24 billion 3-year T-notes.

There are 6 of the Russell 100 companies that report earnings today with notable reports including: McKesson (consensus $2.74), International Flavors & Fragrances (1.42), Zillow (-0.11).

U.S. IPO's scheduled to price today include: Arcadia Biosciences (RKDA), Jaguar Animal Health (JAGX).

Equity conferences during the remainder of this week include: Sanford C. Bernstein & Co Disruptive Trends in Financial Services Conference on Mon-Tue, Bank of America Merrill Lynch Global Metals, Mining & Steel Conference on Tue, Deutsche Bank Clean Tech, Utilities & Power Conference on Tue, SunTrust Robinson Internet & Digital Media Conference on Tue, Jefferies TMT Conference on Tue, Goldman Sachs Global Staples Summit on Tue, Janney Montgomery Scott - Company Marketing : Gaming & Lodging - Columbus, OH on Tue, Janney Montgomery Scott - Company Marketing : Insurance - Columbus, OH on Tue-Wed, Citi Global Energy and Utilities Conference on Tue-Wed, Jefferies Global Technology, Media and Telecom Conference on Tue-Wed, Oppenheimer Industrials Conference on Tue-Wed, Bank of America Merrill Lynch Health Care Conference on Tue-Thu, Jefferies Global Technology, Media and Telecom Conference on Tue-Thu, Morgan Stanley E&P and Oil Services Conference on Tue-Thu, Bank of America Merrill Lynch Small-Mid Cap Conference on Wed, UBS Financial Services Conference on Wed, Credit Suisse Disruptive Technology Conference on Wed, JP Morgan Business Services Conference on Wed, Janney Montgomery Scott - Company Marketing : Biotechnology - Southeast on Wed, MoffettNathanson Media & Communications Summit on Wed-Thu, Bank of America Merrill Lynch Transportation Conference on Thu, Barclays Biotech CEO/CFO Conference on Thu, Royal Bank of Canada Aerospace & Defense Investor Day on Thu.

OVERNIGHT U.S. STOCK MOVERS

Verizon (VZ -0.68%) said it will to acquire AOL (AOL -1.91%) for $50 per share, or $4.4 billion.

Juniper (JNPR +0.41%) was upgraded to 'Buy' from 'Neutral' at BofA/Merrill Lynch.

Rackspace (RAX -1.61%) WAS downgraded to 'Equal Weight' from 'Overweight' at Morgan Stanley.

Public Storage (PSA -1.21%) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs.

International Flavors & Fragrances (IFF -0.12%) reported Q1 EPS of $1.45, better than consensus of $1.42.

Elliott Associates reported a 7.6% stake in CDK Global (CDK +2.00%) .

Providence Service (PRSC -0.83%) reported Q1 adj EPS of 77 cents, over double consensus of 38 cents.

MasTec (MTZ -0.38%) reported Q1 EPS of 7 cents, well below consensus of 18 cents, and then lowered guidance on fiscal 2015 EPS to $1.45, below consensus of $1.76.

Stifel Financial (SF +1.46%) reported Q1 core EPS of 65 cents, below consensus of 73 cents.

Ocean Rig UDW (ORIG -0.13%) reported Q1 EPS of 31 cents, nearly four times consensus of 8 cents.

DryShips (DRYS +2.86%) reported an unexpected Q1 EPS loss with charge of -9 cents, weaker than consensus of a 3 cent profit.

The Gap (GPS +0.66%) fell over 2% in after-hours trading after it reported that its April Same-Store-Sales were down -12% y/y and its Q1 Same-Store-Sales were down -4% y/y.

MARKET COMMENTS

June E-mini S&Ps (ESM15 -0.83%) this morning are down -14.75 points (-0.70%). Monday's closes: S&P 500 -0.51%, Dow Jones -0.47%, Nasdaq-0.45%. The stock market on Monday closed moderately lower on weakness in energy producers with the drop in crude oil prices and on concern that the Fed may be close to raising interest rates after San Francisco Fed President Williams reiterated that policy makers could raise interest rates at any meeting, depending on economic data. The U.S. stock market received some early support from Sunday's news that the Chinese central bank cut its 1-year lending rate by 25 bp to 5.10% for the third rate cut in six months.

Jun 10-year T-notes (ZNM15 -0.52%) this morning are down -12.5 ticks at a 4-1/4 month nearest-futures low. Monday's closes: TYM5 -30.00, FVM5-14.50. Jun T-notes on Monday closed lower on supply pressures ahead of this week's $64 billion refunding operation and on San Francisco Fed President Williams' reminder that the Fed could raise interest rates at any time depending on the incoming economic data.

The dollar index (DXY00 -0.66%) this morning is down -0.654 (-0.69%). EUR/USD (^EURUSD) is up +0.0096 (+0.86%). USD/JPY (^USDJPY) is down-0.11 (-0.09%). Monday's closes: Dollar Index +0.217 (+0.23%), EUR/USD -0.00381 (-0.34%), USD/JPY +0.317 (+0.26%). The dollar index on Monday closed higher. EUR/USD showed some weakness even though Eurozone officials agreed to keep talking to Greece since there was still no tangible progress in the debt negotiations. Moreover, the WSJ reported that the IMF is making contingency plans about what to do if Greece again defaults on its debt. There was some weakness in the Chinese yuan against the dollar after the PBOC cut interest rates for the third time in six months.

Jun WTI crude oil (CLM15 +1.86%) this morning is up +$1.00 a barrel (+1.69%) and Jun gasoline (RBM15 +1.99%) is up +0.0388 (+1.95%). Monday's closes: CLM5 -0.14 (-0.24%), RBM5 -0.0018 (-0.09%). Jun crude oil and gasoline on Monday closed lower on the stronger dollar and on fears of revived U.S. oil production after the recent recovery in oil prices.