TSX to open little changed after solid gain, traders await U.S. retail data

TORONTO – The Toronto stock market looked to start the session little changed Tuesday as traders considered earnings from the energy, telecom and real estate sectors.

The Canadian dollar slipped 0.02 of a cent to 91.75 cents US.

U.S. futures were slightly higher ahead of the release of retail sales data for April. Traders expect a rise of 0.3 per cent following a 1.2 per cent jump in March as sales rebounded from weather related weakness.

The Dow Jones industrial futures gained 32 points to 16,687, the Nasdaq futures rose 9.2 points to 3,617 while the S&P 500 futures were up 3.4 points to 1,896.2.

The TSX racked up a strong triple digit gain Monday while the Dow industrials and S&P 500 hit new highs.

On Tuesday, oil and gas producer Encana Corp. (TSX:ECA) posted first-quarter net earnings of $116 million, or 16 cents per share, compared with a loss of $431 million, or 59 cents per share, in the same quarter of 2013. The Calgary company said it had revenue of $1.89 billion compared with $1.06 billion year-over-year. The company’s cash flow nearly doubled to $1.09 billion, or $1.48 per share.

Manitoba Telecom Services (TSX:MBT) reports first-quarter earnings of $41.9 million, or 54 cents per share, up 35.6 per cent year-over-year. MTS had revenues of $401.5 million versus $406.7 million year-over-year.

RioCan Real Estate Investment Trust (TSX:REI.UN) said that quarterly funds from operations rose two per cent to $127 million or 42 cents per unit.

Traders will also take in earnings during the morning from home improvement retailer Rona (TSX:RON).

In other corporate developments, Quebec-based Valeant Pharmaceuticals International Inc. (TSX:VRX) said it plans to improve its offer for Botox-maker Allergan. The U.S. company on Monday rejected Valeant’s US$48-billion hostile takeover bid, saying it undervalued Allergan. Valeant said in a letter to Allergan shareholders that it will outline the improved offer during a webcast/conference call May 28.

On the commodity markets, June crude in New York gained 64 cents to US$101.23 a barrel.

July copper was unchanged at US$3.15 after running up over two per cent Monday while June bullion faded $4.30 to US$1,291.50 an ounce.

In other economic news, a German survey of investment professionals has found that optimism fell in May for the fifth month in a row, a sign that growth in Europe’s biggest economy may be slowing.

The ZEW indicator fell to 33.1 from 43.2 in April. The decline was bigger than anticipated — the consensus in the markets was for a more modest drop to 40.0.