CNBC's Domm: Today's Agenda in the Markets

Wall Street is heading for a lower opening as some weak earnings and credit market jitters outweigh positive profit reports from companies like Pepsico and Lockheed-Martin. European markets are moving lower after overnight gains in Tokyo and Hong Kong shares.

The stock market has been stuck in a see-saw pattern, rising with strong earnings and merger news and dropping with a thud when credit worries take over. The Dow rose 92 points yesterday to close at 13,943, helped by good earnings news from Merck and a big deal in the oil drilling industry. The Nasdaq rose just about three points and the S&P 500 gained seven points

Pepsi beat analysts' per-share forecast this morning and reported profits of $1.56 billion. Pepsi raised its full-year outlook on a bubbling performance it said was worldwide. AT&T stock initially reacted positively, but now looks weaker after its earnings report. The company earned $2.9 billion for the second quarter. But Reuters reports that AT&T's 146,000 i Phone activations was a disappointing number and it is hitting Apple shares as well.

Lockheed stock is indicated sharply higher after reporting a big earnings bump from higher revenue from its combat aircraft and electronic systems units and lower pension costs. Lockheed earned $778 million, a 34% increase over last year.

Texas Instruments stock fell after hours yesterday after the company reported a weaker second quarter on lower demand for its cell phone chips and other electronics and forecast weaker third quarter revenue. The company earned $614 million, compared with $739 million last year. Dupont is weaker this morning after reporting weaker-than-expected profits of $972 million on falling volumes and higher energy and raw material costs.

CNBC's Phil Lebeau will dig into McDonald's earnings today. The fast food giant said its global sales rose 7.4% on a same store basis, and its revenues jumped 12% to $6.01 billion.

Deals or No Deals?

The stock market has been preoccupied by the creeping, tightening in the corporate credit market and the impact, both real and imagined, on deals. Just yesterday, the sale of $3.1 billion in bonds to cover Carlyle Group and Onex Corp's acquisition of GM's Allison Transmission was postponed, according to the Wall Street Journal.

The firms will try to distribute the loans among banks. Also, Barry Diller's Expedia threw in the towel on a major stock repurchase program because it didn't like the debt terms it was offered to fund the buyback. Besides the widening spreads between corporate and Treasury yields, the market is definitely sending signals that issuing debt is becoming more expensive.

CNBC's senior economic correspondent Steve Liesman will take a look today at how some economists think the corporate bond market is at a major turning point. He will explain what this turn means to the economy and the stock market. Liesman said two of the economists he spoke with each said we are the "back nine" in terms of the era of easy credit.

"Is this a signal of a slowing economy? I don't think what happens here in corporate credit ends up being a factor of slowing the economy. It's a symptom more than a factor. There are a lot of deals that shouldn't be done. Just because they don't get done doesn't mean it's bad," he said.

"The question is whether this means it's an off-to-the-races signal that balance sheets are going to deteriorate. Everything has been better than everybody had a right to expect. What I'm hearing is it's not that this ends up hurting the economy. It's a signal that the economy will eventually end up hurting."

Liesman said if you look back at similar periods, it was as long as two years before the economy followed the signals from the corporate bond market. "Stocks can motor along just fine for a while," he said.

"I have always maintained it is the most important economic signal. But my caveat there is you have to be careful about what's a signal and what's noise," he said.

CNBC's Bob Pisani says stock traders have been focused on the upcoming pricing of Cerberus debt offering to fund the acquisition of Chrysler.

"DaimlerChrysleris the most important story of the week. I think the deal will get done, but it could get done with a substantial sweetener," said Pisani. He said there's been market chat about the bonds floating at a wide spread over LIBOR (London Interbank Offered Rate). "That would be substantial. That's a real signal that it's not a sellers market anymore in bonds. It's a buyers market, and the buyers are sniffing around saying why do I want to buy this. You've got to give us a higher yield."

Earnings Central

CNBC's Silicon Valley Bureau Chief Jim Goldman will be taking a look at AT&T profit today, and also Amazon , which reports after the bell.

"Amazon blew past expectations last quarter and the stock soared, but instead of settling back as it historically has done, shares kept climbing as investors began to believe the extraordinary margins the company reported were the 'new normal,'" said Goldman. "But few analysts I'm talking to seem to think margins at these levels are sustainable and any hint that they're on the decline could hurt shares. Harry Potter is a nice catalyst for the site and is contributing to some optimism around the stock. The trouble is, a lot of the optimism is already built into shares and a disappointment could magnify any share-price slide."

Same Song

Treasury Secretary Hank Paulson was clearly looking at the song book used by Treasury secretaries before him when he said "a strong dollar is in our nation's interest" on Kudlow yesterday. But Paulson also told CNBC's Larry Kudlow that "the dollar's value should be determined in a competitive marketplace, based on economic fundamentals." Guess he's been watching the action in the currency market.

The dollar yesterday was at a record low against the euro and is holding steady this morning though it is weaker against the yen on subprime worries. It is down 4.2% against the euro for the year.

The sliding dollar is starting to catch more attention in the general investor population, according to CNBC's Rick Santelli.

Santelli said he studied the business magazines and newspapers carefully this past weekend. "I read every single publication I could get my hands on. There really were 21 stories about the dollar and 17 stories about subprime. That's what kind of geek I am," Santelli said.

"I continue to say, 'when we say multinationals are doing great, it's nice to hear American companies are doing great.' What we're really saying is people outside our country have an advantage over us in purchasing power. It hurts on imports, and it helps us on exports," Santelli said.

The Financial Times today looks at the pressure the falling dollar is putting on OPEC countries' buying power, making the cartel reluctant to take measures that would reduce oil prices.

Oil Slick

Oil prices are down again this morning after falling 1.2% yesterday on the comments from OPEC that it is indeed concerned about rising prices and that it will pump more crude are down again this morning after falling 1.2% yesterday on the comments from OPEC that it is indeed concerned about rising prices and that it will pump more crude if needed.