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Markets set for a higher open amid positive earnings from Verizon, Halliburton

The Toronto Stock Exchange Broadcast Centre is shown on June 28, 2013. THE CANADIAN PRESS/Aaron Vincent Elkaim
January 21, 2014 - 5:26 AM

TORONTO - Toronto and U.S. markets were poised for a strong open Tuesday as investors largely ignore signs that China's economy has slowed slightly.

The Canadian dollar dipped 0.35 of a cent to 90.97 cents U.S., a day before the Bank of Canada makes its next announcement on interest rates.

U.S. futures were higher, as Wall Street gets set to reopen after the Martin Luther King long weekend.

The Dow Jones industrial futures rose 65 points to 16,462, the Nasdaq futures were 17.20 points higher to 3,602 and the S&P 500 futures were ahead 5.70 points to 1,840.

Markets were initially uneasy on Monday with data suggesting China's fourth-quarter growth declined slightly from the previous quarter but confidence rebounded after the Chinese central bank promised to inject extra liquidity into its financial system. The move comes ahead of the Lunar New Year holiday, when credit often is tight.

"This will reduce the credit crunch fears and assure funding continues to flow into the Chinese economy over this period," said strategist Evan Lucas at IG Markets in a report.

Figures for the latest quarter showed the Chinese economy grew at an annual pace of 7.7 per cent compared with a year earlier, down from the previous quarter’s 7.8 per cent. Growth for the full year was 7.7 per cent, tying 2012 for the weakest annual performance since 1999.

But the news didn't come as a huge surprise to markets, as investors begin to get used to the idea that double-digit Chinese growth may no longer be the norm.

Overnight, China's benchmark Shanghai Composite Index rose 0.9 per cent to 2,008.31 and Tokyo's Nikkei 225 jumped 1 per cent to 15,795.96. Hong Kong's Hang Seng gained 0.5 per cent to 23,033.12 while Seoul, Taiwan and Sydney also rose.

In Europe, France's CAC-40 gained 0.2 per cent to 4,329.53 and Germany's DAX was up 0.3 per cent at 9,743.28. Britain's FTSE 100 was little changed at 6,838.97.

Among smaller Asian markets, Seoul's Kospi rose 0.5 per cent to 1,963.89. Sydney's S&P/ASX 200 rose 0.7 per cent to 5,331.50 while India's Sensex added 0.2 per cent to 21,244.28. Singapore, Bangkok, Jakarta and New Zealand also rose.

In commodities, gold took back some of Monday's gains as February bullion dropped $8.20 to US$1,243.70 an ounce on the New York Mercantile Exchange. The February crude oil contract moved up 22 cents to US$94.59 a barrel, while March copper was down two cents to US$3.32 a pound, while

Meanwhile, investors will stay focused on a heavy slate of fourth-quarter earnings this week from the U.S.

Energy services firm Halliburton reported that its net income grew by 19 per cent, boosted by a strong performance from its international operations. The oilfield-services company earned US$793 million, or 93 cents per share, for the three months ended Dec. 31. That compares with US$669 million, or 72 cents per share, a year earlier.

Income from continuing operations was 90 cents per share. When removing restructuring charges, it was 93 cents per share. Analysts had expected earnings of 89 cents per share on revenue of US$7.55 billion.

Meanwhile, telco Verizon said its addition of more wireless devices to its network helped it post a fourth-quarter net income of US$5.07 billion. The results beat Wall Street expectations and its shares edged higher.

The largest U.S. cellphone carrier's profit amounted to US$1.76 per share. The company lost US$4.23 billion, or US$1.48 per share, in the year-ago period. Excluding one-time items, the company says it posted an adjusted profit of 66 cents per share.

Revenue rose 3 per cent to US$31.07 billion from US$30.05 billion. Analysts polled by FactSet expected a profit of 62 cents per share on US$31.04 billion in revenue.

News from © The Canadian Press, 2014
The Canadian Press

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