TSX set to open little changed, traders look to debt ceiling negotiations

TORONTO – The Toronto stock market looked to open little changed Friday following a strong advance Thursday as traders take a wait-and-see attitude to see where negotiations go on extending the U.S. debt limit.

The Canadian dollar was up 0.02 of a cent to 96.21 cents US ahead of the release of job creation figures for last month. BMO Capital Markets said the consensus calls for a modest gain of 10,000 jobs following a 59,200 gain in August.

U.S. futures were tepid after big gains Thursday with the Dow Jones industrial futures ahead five points to 15,038, the Nasdaq futures down 0.08 of a point to 3,192.8 and the S&P 500 futures down one point to 1,684.

North American markets surged after Republican House Speaker John Boehner proposed extending the debt limit through Nov. 22, conditioned on President Barack Obama agreeing to negotiate over spending cuts and the government shutdown.

The S&P/TSX jumped 164 points and the Dow industrials 323 points Thursday as hopes rose the U.S. will avoid a possible default after the current borrowing limit expires next Thursday.

The president conferred with Boehner and other GOP House leaders on Thursday. They reported no agreement but said talks would continue.

Obama plans a White House meeting with GOP senators on Friday. Senate Republicans say they want to discuss ideas for ending the partial U.S. government shutdown and debt limit standoff.

Oil prices fell with the November crude contract on the New York Mercantile Exchange down $1.26 to US$101.75 a barrel.

December copper was unchanged at US$3.25 a pound while December gold bullion faded $7.20 to US$1,289.70 an ounce.

In corporate news, fertilizer giant Potash Corporation of Saskatchewan Inc. (TSX:POT) (NYSE:POT) is reducing its earnings guidance for the third quarter to reflect lower sales. The company says earnings per diluted share now are expected to come in at about 41 cents, down from the 45 to 60 cents per share it predicted back in July. Its shares drifted 0.75 per cent lower in pre-market trading in New York.

Moody’s Investor Services has cut Talisman Energy’s (TSX:TLM) rating outlook to negative from stable. Moody’s said the downgrade reflects the uncertain outcome of the portfolio transformation taking place under the company’s strategic repositioning.

The change in outlook comes just days after activist investor Carl Icahn disclosed a six per cent stake in the company.

On the earnings front, JPMorgan Chase, the biggest U.S. bank by assets, is reporting a surprise third-quarter loss after a big charge for legal expenses. The bank lost US$400 million or 17 cents a share in the quarter, compared with a then-record $5.7-billion profit a year earlier.

Analyst had expected earnings of the $1.19 a share. Revenue fell eight per cent, to US$23.9 billion, missing analysts’ estimate of $24.1 billion but its shares were ahead 1.4 per cent in pre-market trading.

European bourses were mixed with London’s FTSE 100 index up 0.75 per cent, Frankfurt’s DAX rose 0.3 per cent and the Paris CAC 40 dipped 0.08 per cent.

Earlier, Asian markets advanced in the slipstream of Thursday’s developments. Japan’s Nikkei 225 stock average rose 1.5 per cent, Hong Kong’s Hang Seng added 1.2 per cent, Australia’s S&P/ASX 200 climbed 1.6 per cent and China’s Shanghai Composite Index rose 1.7 per cent.