Economy
S&P has reduced Russia's rating by a notch to BBB-, or one grade above junk level, and kept the country's outlook at negative as the tensions with Ukraine continue to ratchet up. Russia began military exercises on its border with Ukraine yesterday in response to the latter killing five pro-Moscow rebels during attempts to reassert control over the eastern part of the country. The developments have helped send world shares lower today.

Japanese core inflation, which excludes fresh food prices, held steady at 1.3% on year in March but came in below consensus of 1.4%. Core core CPI, which excludes fresh food and energy, slipped to +0.7% from +0.8% in February. The data helped the Nikkei buck a negative global tape and close +0.2%, due to hopes that the Bank of Japan will increase its bond-buying program in order to make sure that inflation rises to the BOJ's target of 2%.

President Barack Obama has ended a three-day trip to Japan without sealing a trade deal that's seen as key to the wider 12-nation Trans-Pacific Partnership. While the U.S. and Japan have made a breakthrough on market access, gaps remain.

Stocks
Microsoft's FQ3 net profit dropped to $5.66B from $6.06B and revenue slipped 0.4% to an expected $20.4B, with both figures hurt by $1.66B in deferred revenue that the company reported a year earlier. EPS of $0.68 beat by $0.05. Commercial sales grew 7% as revenue from Microsoft's (MSFT) Azure cloud computing business soared 150%. New CEO Satya Nadella was on the conference call, something that Steve Ballmer hadn't done in years.

Amazon continued to spend prodigiously in Q1 to boost revenues at the expense of profit and Wall Street continues not to mind too much. Net income grew to $108M from $82M but was still a fraction of the $19.74B in revenues that Amazon (AMZN) generated, with sales growth 23%. Adjusted EPS of $0.23 missed by $0.01. Revenue at Amazon Web Services accelerated to 60% from 52% in Q4, although the segment only accounts for 6% of sales. Shares fell 1.3% premarket.

Alibaba is reportedly considering expanding its IPO to over $20B, which would make it the largest listing in U.S. history. The offering would be above the $19.7B that Visa (V) raised in 2010 and could even top the world record $22.1B that Agricultural Bank of China (OTCPK:ACGBY) attracted in Shanghai and Hong Kong in 2010. Until now, figures of $15-16B+ have been bandied about for Alibaba's (ABABA) IPO.

The Department of Justice is reportedly seeking over $13B from Bank of America (BAC) to settle probes in to the mortgage bonds that BofA sold in the run up to the financial crisis. Any deal could top the $13B that JPMorgan (JPM) said it would pay for similar sins and would add to the $9.5B that BofA is handing over to resolve Federal Housing Finance Agency claims.

Honda's FQ4 net profit surged to ¥170.5B ($1.67B) from ¥75.7B a year earlier as sales climbed 13% to ¥3.1T ($30B), boosted by the weak yen and a rush by Japanese consumers to purchase cars ahead of a rise in sales tax at the start of this month. However, Honda (HMC) forecast that FY 2015 profit growth will slow sharply to 3.6% and reach ¥595B, well below consensus of ¥700B. Notwithstanding, shares were +0.5% premarket.

Four tech giants reportedly agreed to pay $324M to settle an antitrust class-action suit accusing them of creating illegal no-hire agreements in Silicon Valley to keep wages down. The amount is far less than the $3.4B in damages that 64,000 employees were collectively seeking from Apple (AAPL), Google (GOOG), Intel (INTC) and Adobe (ADBE). The deal was disclosed yesterday, although financial terms weren't provided.

Nokia will reportedly name its Indian-born networks boss, Rajeev Suri, as its next CEO on Tuesday and outline what its strategy will be following the sale of its handset business to Microsoft (MSFT), which was set to close today. Suri has been considered the leading candidate to become Nokia's (NOK) CEO after bringing profitability to Nokia Solutions & Networks (NSN) with a major overhaul.

Today's economic calendar:

9:45 PMI Services Index Flash
9:55 Reuters/UofM Consumer Sentiment

Notable earnings before today's open: AAN, ABBV, AEP, ALK, ALV, AON, B, BKW, CL, COV, CVLT, DAN, DTE, F, FLIR, HMC, IDXX, IMGN, LEA, LPNT, MCO, MDXG, SAIA, SIR, STT, TYC, VFC, VTR, WBC, WHR, WY