North American markets set for flat opening following two days of record highs

TORONTO – North American markets were poised for a flat opening Thursday, perhaps a signal that investors are in need of a break from recent record-setting highs as they await earning reports from several corporate heavyweights.

The Canadian dollar was down 0.02 of a cent to 99.65 US.

Wall Street was lower with the Dow Jones industrial futures dropping 12 points to 15,050 after it closed above 15,000 for the first time earlier this week. The Nasdaq futures were down 7.5 points to 2,954.20, while the S&P 500 futures index dipped 1.70 points to 1,627.

The markets have been buyoed in recent days by a number of factors, including signs that the U.S. economic recovery may be gaining momentum and that Europe’s debt crisis may be easing.

Another positive sign was the latest jobless claims numbers from the U.S., which fell 4,000 to 323,000. A modest uptick of 335,000 had been expected after last week’s figures showed claims down to a five-year low.

Commodities were retreating from Wednesday’s settlement prices when oil, gold and copper all closed at levels not seen in more than a month. It has been a roller coaster ride recently for commodity prices, which were down earlier in the week.

The June crude contract on the New York Mercantile Exchange declined 91 cents to US$95.71 a barrel. June gold bullion dropped $7.90 to US$1,465.80 an ounce, after have closed up nearly $25 on Wednesday, while July copper was down four cents to US$3.33 a pound.

In corporate news, Canadian Tire Corp. Ltd. (TSX:CTC.a) says it’s planning on creating a $3.5-billion real estate investment trust, with an initial public offering later this year. The announcement came as the iconic retailer announced a 2.9 per cent increase in first-quarter earnings amid a 1.7 per cent increase in total revenue to $2.48 billion from $2.44 billion in the same 2012 quarter.

BCE Inc. (TSX:BCE) reported a 6.6 per cent increase in net earnings in the first quarter, although revenue remained almost unchanged year over year. Canada’s largest communications company says net earnings attributable to common shareholders were $566 million or 73 cents per share, up from $531 million or 69 cents in the same 2012 period. Revenue rose only slightly, to $4.34 billion from $4.33 billion.

Meanwhile, Bombardier Inc. (TSX:BBD.B) reported a drop in net income in the first quarter, but saw results improve four per cent on an adjusted basis. The Montreal-based plane and train builder says net income was US$148 million or eight cents per share in the three months ended March 31, down from US$155 million, also eight cents per share, in the same 2012 period. On an adjusted basis, net income amounted to US$156 million, up from $150 million. Revenue totalled US$4.3 billion, up from $3.5 billion.

Overnight, world markets declined after higher than expected inflation figures were released from China, giving investors a chance to cash in on recent gains.

Government figures showed China’s consumer price index rose 2.4 per cent in the year to April, up from 2.1 per cent the previous month and ahead of expectations of a more modest advance of 2.2 per cent.

In Europe, Germany’s DAX, which has set a series of record highs, was down 0.2 per cent at 8,238. The CAC-40 in France was 1.1 per cent lower at 3,915 while the FTSE 100 index of leading British shares fell 0.1 per cent to 6,578 ahead of the monthly Bank of England policy decision. No changes in interest rate or stimulus programs were expected.

Earlier, Japan’s Nikkei 225 index dropped 0.7 per cent to 14,191.48 — a modest retreat after a strong run that has seen the Nikkei hit five-year highs.

Hong Kong’s Hang Seng fell 0.1 per cent to 23,211.48 after the Chinese inflation figures. However, mainland Chinese shares were mixed with the Shanghai Composite Index down 0.6 per cent to 2,232.97 while the smaller Shenzhen Composite Index gained 0.2 per cent to 967.69.

South Korea’s Kospi index was also in focus as it jumped 1.2 per cent to 1,979.45 after the Bank of Korea lowered its benchmark interest rate for the first time in seven months.