TSX poised to open higher due to positive tone from world markets, commodities

TORONTO – The Toronto Stock Market was poised for a slightly higher open Wednesday, boosted by a generally positive tone in the world markets and commodity prices.

The Canadian dollar was up 0.06 of a cent at 99.06 cents US.

The Dow Jones industrial futures were ahead eight points to 14,991 after a record-breaking close Tuesday above 15,000.

The Nasdaq futures climbed 3.5 points to 2,950, while the broader market measure, Standard and Poor’s 500 futures index, was up 0.5 points at 1,621.10. The S&P broke past 1,600 for the first time last Friday.

Analysts are watching to see if the markets will continue their record-breaking highs or if the lack of economic and corporate news will result in a pullback. Stronger equity markets are a sign of heightened investor appetite for risk and optimism that the U.S. economic recovery is gaining momentum.

Commodity prices were trading higher prior to the market opening, making up for a dismal performance on Tuesday. The June crude contract on the New York Mercantile Exchange was up 18 cents at US$95.80 a barrel and June gold bullion surged $17.20 to US$1,466 an ounce. July copper was up eight cents to US$3.38 a pound.

The U.S. markets were also buoyed by positive news out of China, with that government reporting that growth in imports and exports accelerated in April, suggesting that the world’s No. 2 economy might be strengthening after an unexpected decline in the first quarter.

In mainland China, the Shanghai Composite Index gained 0.5 per cent to 2,246.3, while the smaller Shenzhen Composite Index rose 1.1 per cent to 965.41. Hong Kong’s Hang Seng added 0.9 per cent to 23,244.35.

Elsewhere in Asia, Japan’s Nikkei 225 index rose 0.7 per cent to 14,285.69, its highest close in almost five years even though the yen once again failed to breach the 100 yen level against the dollar. The dollar was trading 0.1 per cent higher at 98.96 yen.

Australia’s S&P/ASX 200 gained 1.1 per cent to 5,199.80 a day after an interest rate reduction by the country’s central bank while South Korea’s Kospi rose 0.1 per cent to 1,956.45.

In Europe, the FTSE 100 index of leading British shares was up 0.2 per cent at 6,567 while the CAC-40 in France rose 0.5 per cent to 3,940. Germany’s DAX appeared headed for another record close, rising 0.2 per cent to 8,202.

Meanwhile, Canada is mid-way through a heavy earnings week.

Tim Hortons Inc. (TSX:THI) reported a slight contraction in net income in what the iconic coffee and doughnut chain says was an expected “soft quarter.” The Ontario-based company with locations across Canada and in the U.S. had net income attributable to stockholders of $86.2 million or 56 cents per share, down 2.9 per cent from $88.8 million. The chain also announced the appointing of Marc Caira, a longtime senior executive at Nestle, as its new president and CEO.

Also, two media companies reported drops in first-quarter income.

Torstar Corp. (TSX:TS.B) says it saw a decline in both revenue and net income in the first quarter as the newspaper and book publisher continued to face challenges in the print advertising market.

The company, which operates a number of digital properties along with publishing the Toronto Star and Harlequin books, says net income attributable to equity shareholders tumbled $13.3 million to $4.2 million or five cents per share in the quarter. That compared with $17.5 million or 22 cents per share in the same 2012 period.

Quebecor Inc. (TSX:QBR.B) has reported a sharp drop in first-quarter net income, although revenues remained stable overall, falling less than one per cent. The Quebec-based majority owner of Quebecor Media Inc., says net income attributable to shareholders was $35.6 million or 57 cents per share, compared with $71.4 million or $1.13 per basic share in the first quarter of 2012.