Toronto's main stock index looked set to open higher on Tuesday after Chinese manufacturing data showed signs of improvement, but gains might be limited by weak euro-zone data and mounting concerns that Spain may need a full bailout.
The S&P/TSX Composite index tumbled 77.37 points to end Monday’s session at 11,545.54. Canada stock futures traded up 0.1% Tuesday morning.
The Canadian dollar inched forward 0.08 cents Tuesday morning to 98.28 cents U.S.
Stocks to watch this morning include Husky Energy, the integrated oil producer and refiner, which reported a 36% fall in second-quarter profit on lower production and weaker realized crude oil prices.
Rogers Communications Inc reported higher adjusted earnings as it boosted revenue and margins in its mobile phone business despite rising competition.
On the economic slate, Statistics Canada reported this morning that Retail sales rose less than expected in May, up 0.3%, compared to expectations for a 0.5% rise. Excluding autos, sales rose a firmer-than-expected 0.5% (the consensus there being 0.1%).
ON BAYSTREET
The TSX Venture Exchange retreated 22.03 points to 1,174.16. The Nasdaq Canada index plunged 8.07 points to 330.88.
ON WALLSTREET
U.S. stocks were poised to open little changed Tuesday as a report showing an improvement in Chinese manufacturing offset ongoing worries about Europe.
Futures for the Dow Jones pointed downward six points, or 0.1%, to 12,639, about 30 minutes before the opening bell.
Futures for the S&P 500 lost 2.6 points, or 0.2%, to 1,341.10, and for the Nasdaq, futures fell 0.50 points to 2,578.75
In the United States, investors will have a host of quarterly earnings to mull over, including results from DuPont, UPS and AT&T. Apple and Netflix are on tap to report after the close.
U.S. stocks sank Monday as investors flocked to safe heavens such as Treasuries. The 10-year yield hit a record low of 1.395%.
The Federal Housing Finance Agency will release its Housing Price Index for May at 10 a.m. ET.
Early Tuesday, HSBC said its China Manufacturing Purchasing Managers' Index came in at 49.5 for July. While any reading below 50 indicates contraction, it is the highest number reported since February and shows significant improvement.
That helped offset some of the doom and gloom coming out of Europe.
Rating agency Moody's cut the outlook on Germany's prized Aaa credit rating to "negative" after the closing bell Monday, citing concerns about the stability of the euro-zone and the potential for more bailouts.
Moody's also revised its outlooks on the Aaa ratings of the Netherlands and Luxembourg to "negative." Finland is the only country in the 17-nation euro-zone to maintain its Aaa rating and a stable outlook.
Meanwhile, European manufacturing activity remains sluggish. Activity continued to contract across the euro-zone in July, while Germany's Purchasing Managers' Index fell to a three-year low.
Spain remains in the spotlight, with the yield on the 10-year bond hitting a fresh euro-era record high of 7.625%. That came as Spain successfully auctioned €3 billion of three-month and six-month government bills, but investors demanded higher interest rates amid ongoing fears that Spain could require a full-blown bailout.
European stocks were mixed in afternoon trading. Britain's FTSE 100 and France's CAC 40 ticked down slightly while the DAX in Germany edged up.
Asian markets ended mixed. The Shanghai Composite rose 0.2%, while Japan's Nikkei slid 0.2% and the Hang Seng in Hong Kong shed 0.8% in a session shortened by a typhoon warning.
Oil prices shed 14 cents to $88.00 U.S. a barrel.
Gold lost $3.40 to $1,574.10 U.S. an ounce.
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