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Toronto stock market set to open little changed, traders look to Alcoa earnings

A tote board displays figures for the TSX for the year in Toronto, on Dec.31, 2012. THE CANADIAN PRESS/Frank Gunn

TORONTO - The Toronto stock market was expected to open little changed Tuesday ahead of Alcoa Inc.'s kickoff of the fourth quarter corporate earnings season after the close.

Energy and mining companies could find some lift from rising oil and metal prices.

The Canadian dollar rose 0.07 of a cent to 101.52 cents US.

U.S. futures were flat as the Dow Jones industrial futures edged up a point to 13,308, the Nasdaq futures were down 0.5 of a point to 2,717 and the S&P futures dipped 0.75 of a point to 1,455.

Alcoa (NYSE:AA) is expected to turn in earnings per share of six cents, compared to a loss of three cents a share a year ago.

But traders will likely be most interested in the resource giant's outlook against a background of tepid economic growth around the globe. Alcoa has been dealing with sharply lower aluminum prices, down 15 per cent from a year ago.

Alcoa traditionally starts the run of U.S. quarterly earnings. The company is viewed as a bellwether for the overall economy as its products are used in everything from cars to aircraft to appliances.

It's also viewed as a good indication of where the overall resource sector is at, an important consideration for a market like the TSX that is heavily weighted in favour of commodity-based companies.

Alcoa shares were up 0.55 per cent in pre-open trading in New York.

Oil prices advanced ahead of the release of data expected to show a rise of 1.5 million barrels in crude oil stocks and 2.6 million barrels in gasoline stocks last week, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

The American Petroleum Institute will release its report on oil stocks later Tuesday.

The February crude contract on the New York Mercantile Exchange advanced 36 cents to US$93.55 a barrel.

The February bullion contract gained $6.90 to US$1,653.20 an ounce after three days of losses. Gold prices have suffered in recent days because of uncertainty about whether the U.S. Federal Reserve might end its stimulus program of bond buying in the second half of 2013. Minutes from the Fed’s latest policy meeting showed a split over how long to continue the purchases amid concerns that they could destabilize the economy.

The bond buying, known as quantitative easing, has supported bullion prices because of worries the program would drive inflation higher. Gold is seen as a hedge against inflation.

The March copper contract was unchanged at US$3.68 a pound.

On the corporate front, African Barrick Gold PLC stock plunged about 20 per cent on the London stock exchange after Canadian parent Barrick Gold Corp. (TSX:ABX) announced that talks about a potential sale to China National Gold have broken off without a deal. The Toronto-based gold and copper producer owns about three-quarters of the ABG shares outstanding.

In economic news, traders took in data showing that the chronic government debt crisis in Europe has pushed unemployment to record highs in the 17-nation eurozone. The jobless rate hit 11.8 per cent in December, up from 11.7 per cent the previous month.

Investors found some comfort in a separate report showing business and consumer sentiment in the eurozone rose in December by more than analysts were expecting and that retail sales edged up in November. That suggests that the improvement in financial markets during those months helped economic activity stabilize.

Analysts warned, however, not to expect any imminent turnaround in the economy.

European bourses were positive as London's FTSE 100 index rose 0.2 per cent, Frankfurt's DAX inched up 0.05 per cent and the Paris CAC 40 climbed 0.54 per cent.

Earlier, Japan’s Nikkei 225 index tumbled 0.9 per cent as the yen crept upward against the U.S. dollar.

Hong Kong’s Hang Seng fell 0.9 per cent while South Korea’s Kospi lost 0.7 per cent. Benchmarks in Singapore, Taiwan and Thailand fell, while Malaysia and the Philippines rose. Mainland Chinese shares were mixed. Australia’s S&P/ASX 200 shed 0.6 per cent.

News from © The Canadian Press, 2013
The Canadian Press

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