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Toronto stock market looks to rise as Federal Reserve meeting gets underway

TORONTO - The Toronto stock market appeared ready to extend its upward move Tuesday morning as traders focus on a two-day Federal Reserve Board meeting that could lead to an attempt to boost economic confidence.

The Canadian dollar was up 0.35 of a cent at 98 cents US.

U.S. futures were higher with the Dow Jones industrial futures ahead 27 points to 12,713. The Nasdaq futures gained 10 points to 2.598 and the S&P 500 futures added 3.25 points to 1,344.

Some observers expect the Fed will make a move to extend its Operation Twist, under which it sold $400 billion in short-term securities and replaced them with long-term securities in an effort to put more downward pressure on long-term rates.

Meanwhile, Statistics Canada reported that wholesale sales rose 1.5 per cent in April to $49.3 billion, mainly due to a 48.5 per cent increase in sales of agricultural supplies. Excluding that industry, overall sales were unchanged from March.

In commodities, the July crude contract on the New York Mercantile Exchange was up 22 cents at US$83.49 a barrel.

July copper was up one cent at US$3.40 a pound, while August gold edged down 10 cents to US$1,626.90 an ounce.

In corporate developments, fuel cell company Ballard Power Systems (TSX: BLD) cut its 2012 sales guidance and said Monday it now expects an adjusted operating loss due to delays in signing a deal in Brazil. Revenue is expected to total about $85 million for the year, down from an earlier estimate of $100 million.

World stock markets were largely flat as relief from Greece's election results evaporated amid worries that the financial crisis in the 17 countries that use the euro was far from over.

A narrow victory by Greek conservatives, who favour upholding an austerity program that their country entered into for an international bailout, initially relaxed fears of a chaotic exit by Greece from the euro.

But now the focus is back on Spain, whose borrowing costs surged Monday above the seven per cent level that had forced Greece, Portugal and Ireland to seek international help.

The rate reflects what return investors are willing to accept when a country auctions its bonds. Spain's high bond yields are a sign that investors are increasingly concerned that the country will struggle to save its crippled banks.

European stocks posted limited gains in early trading. Britain's FTSE 100 rose one per cent to 5,546.19 and Germany's DAX added 0.51 per cent to 6,280.59. Franc's CAC-40 fell 0.42 per cent to 3,078.33.

Asian stocks were sluggish. Japan's Nikkei 225 index fell 0.8 per cent to close at 8,655.87. Hong Kong's Hang Seng fell slightly to 19,416.67 and Australia's S&P/ASX 500 lost 0.3 per cent to 4,123.30.

South Korea's Kospi was 0.3 per cent down at 1,886.96. Benchmarks in mainland China and Taiwan fell. But those in India, Singapore and Indonesia rose.

News from © The Canadian Press, 2012
The Canadian Press

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