TSX to open higher on Fed relief, BlackBerry posts worse than expected loss

People walk in Toronto's financial district in Toronto, on Oct. 29, 2012. THE CANADIAN PRESS/Nathan Denette

TORONTO - The Toronto stock market headed for a higher open Friday at the end of a positive week after the Federal Reserve removed a great degree of uncertainty over its stimulus plans.

Traders will also focus on BlackBerry (TSX:BB)(Nasdaq:BBRY) after the struggling smartphone maker handed in quarterly earnings that were worse than expected.

BlackBerry posted a loss of US$4.4 billion or $8.37 a share, down from a profit of $9 million or two cents a share a year ago. Ex-items, earnings were $353 million or 67 cents a share, 23 cents below estimates. Revenue of $1.2 billion missed estimates of $1.6 billion. But its shares gained 3.5 per cent in pre-market trading in New York as BlackBerry also said it finished the quarter with $3.2 billion in cash, and expects that strong cash position to continue in the current quarter. The firm also announced it had entered into a five-year strategic partnership with Foxconn to make phones in Indonesia and other fast-growing markets.

The Canadian dollar declined 0.11 of a cent at 93.65 cents US.

U.S. futures were positive two days after the the Fed ended months of speculation and announced it will start to end its latest asset-purchase program.

The Dow Jones industrial futures ahead 12 points to 16,127, the Nasdaq futures lost 4.5 points to 3,497.3 and the S&P 500 futures added 1.25 points to 1,803.25.

Policymakers decided to cut from January $10 billion the Fed’s monthly purchases of U.S. Treasuries and mortgage-backed securities. It also said it “will likely reduce the pace of asset purchases in further measured steps at future meetings.”<

The also Fed emphasized that its main interest rate would remain low until U.S. unemployment falls below 6.5 per cent. It’s now seven per cent.

On the commodity markets, February crude on the Nymex lost 30 cents to US$98.74 a barrel.

Gold prices were steady after plunging over $40 on Thursday to three-year lows. The February contract on the New York Mercantile Exchange dipped 60 cents to US$1,193 an ounce.

QE had supported gold prices because of inflationary fears. But inflation is tame in many countries and data out earlier this week showed the consumer price index rising at an annual rate of only 1.2 per cent, significantly below the Fed’s inflation target of two per cent.

Gold prices are down 29 per cent so far this year while the TSX Global Gold sector has tumbled about 50 per cent

March copper gained a cent to US$3.31 a pound.

European bourses were mixed with London's FTSE 100 index up 0.18 per cent, Frankfurt's DAX was up 0.43 per cent, and the Paris CAC 40 added 0.01 per cent.

Earlier in Asia, Japan’s Nikkei index recovered some early losses near a six-year peak as investors welcomed the continued weak yen, which is expected to boost exports. Hong Kong’s Hang Seng index fell 0.3 per cent and China’s Shanghai composite dropped two per cent on fresh concerns of a shortage of credit.

The People’s Bank of China moved late Thursday to inject liquidity after the interbank market showed stress, but concerns over a repeat of the summer’s credit crunch weighed on the market.

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