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Toronto stock market heads for lower open, economic worries depress commodities

Trucks drive along a road at an oilsands mine facility seen from the air near Fort McMurray, Alta., Sept. 19, 2011. THE CANADIAN PRESS/Jeff McIntosh
July 16, 2012 - 8:10 AM

TORONTO - The resource-heavy Toronto stock market was set for a subdued start to the week while commodity prices lost ground on worries about global economic conditions.

The Canadian dollar backed off 0.07 of a cent to 98.49 cents US a day before the Bank of Canada makes its next scheduled announcement on interest rates. Economists expect the bank will leave its key rate unchanged at one per cent. Analysts will be looking at the tone of the bank's accompanying statement for indications of when the bank might start to raise rates.

U.S. futures were weak ahead of a raft of U.S. corporate earnings statements that should shed more light on the state of the U.S. economic recovery.

The Dow Jones industrial futures dipped 33 points to 12,679, the Nasdaq futures lost 5.8 points to 2,571.2 while the S&P 500 futures declined 3.6 points to 1,348.1.

Over the course of the week, around 90 companies listed on the S&P 500 are due to report earnings. They include Bank of America, Coca-Cola, Goldman Sachs, Google, IBM, Intel, Microsoft and Morgan Stanley.

Stock markets finished Friday in the wake of positive earnings from JPMorgan Chase & Co. and Wells Fargo Bank. Weak Chinese growth data raised hopes that officials will move to take further steps to stimulate the economy.

On Monday, Citigroup reported earnings which beat expectations. The bank said earnings excluding extraordinary items came in at US$1 a share, versus expectations of 89 cents.

Revenues came in at US$18.4 billion, less than the $18.76 billion that analysts expected and its shares rose about 2.3 per cent in pre-market trading.

Traders will also look to U.S. retail data before the market open. It is expected that sales in June rose by 0.2 per cent following a 0.2 per cent dip in May.

Commodity prices eased after sharp runups in oil and copper at the end of last week.

The August crude contract on the New York Mercantile Exchange declined 30 cents to US$86.80 a barrel.

Copper prices slipped three cents to US$3.47 a pound while bullion moved down $6.90 to US$1,585.10 an ounce.

Europe’s debt crisis will also remain near the top of markets’ concerns. In particular, investors will be awaiting details of Spain’s bank bailout. Later this week, eurozone countries are expected to give Spain €30 billion as part of a larger bailout for its banks.

Worries over Spain and the other indebted euro countries, have weighed on Europe’s single currency over the past few weeks.

European bourses were tepid with London's FTSE 100 index slipped 0.03 per cent, Frankfurt's DAX was off 0.14 per cent and the Paris CAC40 gave back 0.21 per cent.

Earlier in Asia, Hong Kong’s Hang Seng inched up 0.2 per cent, South Korea’s Kopsi rose 0.3 per cen, Australia’s S&P/ASX 200 added 0.6 per cent while China’s Shanghai Composite lost 1.7 per cent. Japan’s markets were closed for a public holiday.

News from © The Canadian Press, 2012
The Canadian Press

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