Economy
Asian stocks marched higher today after a preliminary reading on China's manufacturing came in ahead of expectations and minutes released from the FOMC meeting in the U.S. didn't contain any surprises. Japan's Nikkei 225 rose 2.1% to pace the region, while South Korea's Kospi and Hong Kong's Hang Seng put in more moderate gains. Stocks in Europe were mostly higher on the same mix of news. Preliminary euro-zone PMI readings indicated business activity on the continent is picking up.

The Bank of Russia moved to limit the volatility of the ruble by reducing the number of daily currency interventions. Currently, the ruble is trading in a corridor where the central bank can let it float free. The central bank says it will still step in to intervene to maintain financial stability if needed. Next year, the bank is expected to adopt inflation targeting.

China's HSBC flash PMI reading came in at 49.7 to mark an improvement of 160 basis points from the level recorded in April and beat the median estimate of analysts calling for 48.3. Though the factory activity index is on track to reach a five-month high, it still sits in contraction territory. Analysts think stimulus measures from the government are starting to provide a small lift.

Vietnam is mulling over taking China to international court in order to settle a territorial dispute in the South China Sea. The two nations have been bickering on and off for years over the region, but the sudden emergence of a state-owned deep-sea oil rig near the Paracel Islands has Vietnam pressing for a resolution with more intensity.

Stocks
Royal Dutch Shell plans to scrap its dividend to shareholders in the form of stock in order to focus on buying back shares and paying out a cash dividend. The company will implement the change starting in the second quarter. During the first quarter of the year, Royal Dutch Shell (RDS.A, RDS.B) bought back $1.2B worth of its B shares.

SABMiller rode strength in developing markets to an improvement in net profit for the fiscal year which ended on March 31. The global brewer reported profit of $3.38B vs. $3.25B a year ago. Currency devaluations in emerging markets had a negative impact of $400M on earnings. Full-year sales volume was up 2%, paced by a 5% gain in soft drink volume. Lager volume rose 1% during the period. Shares of SABMiller (OTCPK:SBMRY) were up 3.6% in London trading.

The tobacco industry could see a major shakeup with Lorillard (LO) and Reynolds American (RAI) reported to be hunkered down in advanced merger talks. A combination of the two tobacco sellers would create powerful synergies and launch a powerhouse in the e-cigarette business with Lorillard's Blu brand a dominant force and Reynold's Vuse set for a national roll-out this summer. British American Tobacco (BTI) owns a 42% stake in Reynolds and could delay the deal if it decides it wants to acquire the rest of Reynolds for itself. A 10-year standstill agreement between BAT and Reynolds is set to expire in July. Shares of Reynolds rose 4.4% yesterday, while Lorillard was up 10% off of buzz that a deal is close.

Chinese e-commerce giant JD.com debuts today on the Nasdaq after pricing its IPO at $19 per share, above the expected $16 to $18 range. JD (JD) raised $1.78B in the offering at a level that valuates the company at $25.7B - a richer valuation on a revenue forecast basis than Amazon (AMZN). Investors interested in Alibaba (ABABA) will watch today's festivities closely.

Major retailers will be in focus today with Best Buy (BBY), Dollar Tree (DLTR), Ross Stores (ROST), and Gap (GPS) all set to report on earnings. It's been a tough week for the sector with Target (TGT), Dick's Sporting Goods (DKS), and Staples (SPLS) showing weak sales trends amid a relentless promotional atmosphere. Analysts have been caught off-guard by the number of companies which have lowered their full-year guidance. Even TJX Companies (TJX) and PetSmart (PETM), which both have strong brand loyalty with consumers, have showed some signs of cracking.

WWE Studios will partner with Lions Gate (LGF) for six new action films under the terms of a new deal between the companies. The World Wrestling Entertainment (WWE) subsidiary has worked with Lions Gate before on productions to some degree of success. Paul Wright, also known as Big Show, will star in the first film of the new partnership.

Starboard Value plans to dig in and fight to take over the board of Darden Restaurants (DRI). The hedge fund was long odds to stay quiet after Darden decided to sell Red Lobster in a move Starboard thinks destroys shareholder value. Darden is trying to push the Red Lobster sale through without a shareholder vote.

Spotify gave a rare peek at its usage data late yesterday. The music service disclosed it has 10 million paying subscribers and 40 million monthly active users. Global expansion has helped drive the strong rate of growth for the private company which was valuated at more than $4B by its last funding round.

TransCanada is in talks with customers about shipping Canadian crude to the U.S. by rail as an alternative to its Keystone XL pipeline project that has been mired in political delays, CEO Russ Girling says in his first comments confirming growing speculation that the company might use more costly - and more dangerous - railway shipments as a stopgap alternative to the pipeline. The company could ship crude by rail from its main storage hub in Canada to Nebraska, where it would then flow to the Gulf through an existing pipeline. TransCanada (TRP) has been battling with the Obama administration for five years on the Keystone project.

Today's economic calendar:

8:30 Initial Jobless Claims
8:30 Chicago Fed National Activity Index
9:45 PMI Manufacturing Index Flash
10:00 Existing Home Sales
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

Notable earnings before today's open: ASEI, BBY, BKE, BONT, BRC, CAJ, DLTR, ESI, LTXC, MOV, PDCO, PERY, PLCE, RY, SHLD, TF, TTC

Notable earnings after today's close: ARO, ARUN, BRCD, CPWR, DRYS, GME, GPS, HPQ, MENT, MRVL, NDSN, NWY, ORIG, ROST, TFM, TIVO, VNET, YOKU, ZUMZ