Source: The Canadian Press
The Toronto stock market was headed for a lower open Tuesday as commodity prices sank on investor uncertainty over Irish debt and reports that tensions are mounting in North and South Korea.
The Canadian dollar fell 0.41 cents to 97.87 cents US as the greenback made gains against most other currencies and investors seek the safety of the US dollar amidst global uncertainty.
The stronger U.S. dollar also pushed commodities prices down.
The January crude contract lost $1.20 cents US$80.54 a barrel on the New York Mercantile Exchange.
The December copper contract on the Nymex slipped five cents to US$3.70 while the December gold contract gained four dollars to US$1361.80.
Canadian investors will also weigh in on a Statistics Canada report that found consumer prices rose more than expected in October and the release of retail trade figures from September. Together, the reports help paint a picture of the overall health of the Canadian economy.
Meanwhile, Statistics Canada found that Canada’s annual inflation jumped half a point to 2.4% last month, as the cost of gasoline, cars, shelter and food all rose. The increase brings the country’s annual inflation rate to the highest it’s been in two years.
U.S. futures markets moved lower on the uncertainty with Dow Jones futures down 99 points at 11,066 and Nasdaq futures down 21 points to 2133.5 and the S&P 500 futures down 12.9 points to 1,185.
In the U.S, markets are waiting for the Commerce Department’s latest estimate of how much the U.S. economy grew in the third quarter. The government is expected to report that the gross domestic product rose at an annual rate of 2.3%, up from a 2% estimate last month.
Other reports due from the U.S. reports this week include October home sales, an update of consumer sentiment. Those will be released in the next two days before the U.S. markets effectively shut down mid week as traders take a Thanksgiving break.
Market sentiment, already downbeat as Europe’s debt crisis shows few signs of abating, was hit further by the news that North Korea bombarded the South Korean island of Yeonpyeong, near their disputed western border, setting buildings ablaze and killing at least two marines, according to South Korean officials.
Investors are also uneasy Tuesday about the economy in Europe after Ireland accepted a massive bailout. The concern now is that Portugal may be the next country that needs help.
Experts said the bailout, which is expected to amount to around 90 billion euros (US$123 billion), has done little to shield other heavily indebted countries from a potential collapse in investor confidence.
In Canadian corporate news, MKS Inc. (TSX:MKX) says its profits rose 49% in the second-quarter driven by higher demand, and announced it would raise its dividend.
The Waterloo, Ont.-based company, which reports in U.S. currency, said that net income was $2.4 million or 23 cents per share in the three month period ended Oct. 31.
That compares to $1.6 million or 16 cents per share in the same period a year ago. Revenue increased 19% to $17.4 million from $14.7 million.
Nearly all European and Asian stock markets fell and the dollar gained Tuesday amid fears Ireland’s debt crisis will spread to other financially weak European countries.
In Europe, the FTSE 100 index down or 0.8%, while Germany’s DAX fell 0.7%, and France’s CAC-40 was 1.2% lower.
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