Toronto stock market heads for flat open ahead of economic data, earnings

TORONTO – The Toronto stock market looked set to open little changed Tuesday as traders looked to new stimulus measures from the Japanese government and awaited U.S. manufacturing and housing data.

The Canadian dollar moved up 0.11 of a cent from Friday’s close to 91.16 cents US. Canadian banks and North American stock markets were closed Monday for holidays.

U.S. futures were positive amid major dealmaking in the pharmaceutical sector. Actavis PLC is buying fellow drugmaker Forest Laboratories Inc. in a cash-and-stock deal worth about US$25 billion.

The Dow Jones industrial futures ahead 35 points to 16,162, the Nasdaq was 4.5 points higher to 3,665.5 while the S&P 500 futures gained 2.5 points to 1,837.5.

The Bank of Japan plans to top up its monetary stimulus by doubling the size of its fund to support bank lending and its fund to support economic growth. The funds, which were due to expire shortly, were extended for another year after fourth quarter economic growth fell short of forecasts despite massive fiscal and monetary stimulus intended to engineer a recovery.

Later in the morning, traders will take in the Empire State Manufacturing Index for February. The snapshot of manufacturing activity in the U.S. Northeast is expected to decline to nine from 12.5 in January, likely in part to severe winter weather conditions.

Also, the National Association of Home Builders’ housing market index is expected to stay unchanged at the 56 mark for February. The index has drifted slightly lower in recent months because of a sharp rise in mortgage rates.

Strong earnings news and positive economic data pushed the TSX up 1.95 per cent this past week while the Dow industrials surged 2.28 per cent.

This week, the resource sector will produce a variety of earnings reports from companies including HudBay Minerals (TSX:HBM), Lundin Mining (TSX:LUN) and Sherritt International (TSX:S). Gold miners Iamgold (TSX:IMG) and Yamana Gold (TSX:YRI) also post results.

On Tuesday, Choice Properties Real Estate Investment Trust (TSX:CHP.UN) reported an adjusted profit of $36.8 million, which came in above a forecast of $34.6 million when Choice prepared its initial public offering last summer. Its funds from operations, another key financial measure for real estate companies, was $82.8 million compared with the forecast of $78.9 million.

Home improvement chain Rona (TSX:RON) also posts earnings Tuesday.

In the U.S., the Coca-Cola Co. said Tuesday it earned $1.71 billion, or 38 cents per share in the latest quarter. Not including one-time items, it earned 46 cents per share, in line with expectations. A year ago, the company earned $1.87 billion, or 41 cents per share. Revenue fell to $11.04 billion, short of the $11.31 billion Wall Street expected.

Prices were mixed on commodity markets as the March crude contract on the New York Mercantile Exchange gained 77 cents to US$101.07 a barrel.

March copper was up a penny to US$3.27 a pound while April bullion declined $4.20 to US$1,314.40 an ounce.

European markets were mixed as London’s FTSE 100 index gained 0.54 per cent, Frankfurt’s DAX rose 0.3 per cent and the Paris CAC 40 dipped 0.12 per cent.

Earlier in Asia, the Nikkei 225 in Tokyo vaulted 3.1 per cent, Hong Kong’s Hang Seng rose 0.2 per cent to 22,587.72 but China’s Shanghai Composite fell.