A man walks past a building in Toronto that used to house the Toronto Stock Exchange on Thursday, August 18 2011. THE CANADIAN PRESS/Aaron Vincent Elkaim

TORONTO - The Toronto stock market was set for a strong open with traders feeling more optimistic that the eurozone debt crisis is under control.

Equity futures and commodity prices shot higher following a report that European Central Bank president said the institution is ready to step up to protect the euro.

Mario Draghi, in London for an investment conference, said that the "ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough."

The Canadian dollar surged 0.65 of a cent to 99.15 cents US.

U.S. futures also ran ahead with the Dow Jones industrial futures up 123 points to 12,760, the Nasdaq climbed 31.25 points to 2,574.75 and the S&P 500 futures gained 15.3 points to 1,350.2.

The eurozone debt crisis has weighed on markets for over two years. Greece, Portugal and Ireland — all countries saddled with huge debts — have been forced to seek bailouts. The crisis has more recently moved to Italy and Spain, which have been forced to pay ever higher yields in order to finance their debts.

Market-watchers took Draghi’s comment as a signal that the ECB could be more willing to intervene in markets to lower those borrowing rates — which the bank has in recent months said is not part of its mandate.

Market sentiment had also been given a boost already on Wednesday, when ECB policymaker Ewald Nowotny suggested that Europe’s bailout fund could be given a banking license. That would give it the ability to borrow money from the ECB. Such a move would be of particular significant for Spain and Italy as the current bailout fund does not have enough money to rescue them both.

The yield on Spain's 10-year government bonds declined following Draghi's comments, moving down to 7.04 per cent from 7.36 per cent. Still, anything over seven per cent is considered unsustainable in the long run and there was plenty of skepticism that the crisis has turned a corner.

"We have heard this type of aggressive rhetoric before and look where we are," observed Ian Pollick, Fixed Income Strategist at RBC Dominion Securities.

"It is worth taking these comments with a hint of optimism and a hint of skepticism."

Commodities advanced with September crude on the New York Mercantile Exchange ahead 70 cents to US$89.67 a barrel.

Copper gained five cents to US$3.42 a pound while bullion gained $9.80 to US$1,617.90 an ounce.

The prospect of further ECB action helped take some of the sting from a run of largely disappointing earnings reports.

Potash Corp. of Saskatchewan Inc. (TSX:POT) reported second-quarter earnings of C$522 million, or 60 cents per share, down from $840 million a year ago. The company said while the results reflect strong underlying performance, earnings were impacted by a $341 million impairment recorded on its investment in Chinese fertilizer company Sinofert Holdings Litd.

Analysts polled by Thomson Reuters were on average expecting earnings per share of 99 cents.

Barrick Gold Corp. (TSX:ABX) reported quarterly net earnings fell to US$750 million, or 75 cents per share, $1.16 billion a year ago. The results missed analyst expectations by 18 cents per share, according to average estimates from Thomson Reuters. Barrick also said it has launched a review of its mines and projects to determine which ones offer enough return on the investment

Dow Chemical Co. said its second-quarter net income fell 34 per cent to US$649 million or 55 cents a share as weaker demand led to lower prices. Softness in Europe and a stronger dollar also weighed on results. The biggest chemical maker in the U.S. missed Wall Street estimates by nine cents and its shares dropped four per cent in premarket trading.

Overseas, major companies like engineering group Siemens and carmaker Volkswagen warned that the economic slowdown in Europe would hurt profits in coming quarters.

Siemens shares were down almost 4 per cent while Volkswagen fell 2.3 per cent. Telecommunications maker Alcatel-Lucent suffered an 8.6 percent drop. Oil company Shell, which reported lower profits, saw its shares fall 3.1 per cent.

Consumer goods maker Unilever was a bright spot, gaining 4.7 per cent after reporting a strong rise in profits. But its improvement in business was due to growth outside of Europe, where sales in fact fell.

European courses jumped following the ECB president's comments with London's FTSE 100 index ahead 1.06 per cent, Frankfurt's DAX rose 1.42 per cent while the Paris CAC 40 jumped 2.44 per cent.

Earlier in Asia, Japan’s Nikkei 225 stock average climbed 0.9 per cent, Hong Kong’s Hang Seng added 0.1 per cent, South Korea’s Kospi gained 0.7 per cent, Australia’s benchmark rose 0.6 per cent while the Shanghai Composite shed 0.4 per cent.

News from © The Canadian Press, 2012