The Canadian Press

The Toronto stock market could be in for modest gains as oil prices advanced and the latest round of U.S. earnings reports provided some reassurance about economic prospects.

But China continues to loom large over market activity after economic growth came in at 10.7% in the fourth quarter and 8.7% last year. The rapid growth reinforced concerns that China will move to cut lending and tighten monetary policy to put a lid on inflation, which could dampen a global economic rebound.

Those worries weighed on stocks Wednesday, helping send the TSX down 84 points.

The Canadian dollar dipped 0.04 of a cent to US95.47¢.

U.S. futures indicated a slightly higher open with the Dow Jones industrials ahead 10 points to 10,567, the Nasdaq futures rose 3.5 points to 1,870.5 and the S&P 500 futures up 1.7 points to 1,135.7.

The March crude contract on the New York Mercantile Exchange was ahead 31¢ to US$78.05 a barrel.

Husky Energy Inc. (TSX:HSE) said Wednesday it has managed to shave more than $1 billion off the price tag of its Sunrise oilsands project, part of a joint-venture with British energy giant BP PLC. The Calgary-based company said it now expects Phase 1 of the project to cost $2.5 billion, down from earlier estimates of $3.8 billion to $4 billion.

A stronger U.S. dollar and concerns about Chinese expansion pushed oil down $1.40 on Wednesday.

The February gold contract on the Nymex declined $7.40 to US$1,105.20 an ounce while March copper was unchanged at US$3.36 a pound.

The latest batch of earnings provided some hope that the economy is continuing its recovery. Xerox Corp.’s fourth-quarter results topped expectations, as did its profit outlook for 2010.

UnitedHealth Group Inc. said its profit jumped 30%, which easily beat expectations. The managed care company also affirmed its 2010 earnings outlook, which is in line with analysts’ forecasts.

Goldman Sachs Group Inc. says it earned US$4.79 billion in the fourth quarter as the bank’s trading business again outdistanced the rest of the financial industry. Goldman said Wednesday it earned US$8.20 a share in the last three months of the year as fixed income, commodities and currency trading buoyed its profits for the third straight quarter. Analysts surveyed by Thomson Reuters predicted Goldman would earn $5.20 a share.

Shares of Goldman, Xerox and UnitedHealth moved higher in pre-opening trading.

On Wednesday, cautious outlooks from major companies like IBM Corp. and Bank of America Corp. reminded traders an economic recovery is still fragile.

Credit card lenders Capital One Financial Corp. and American Express Co. as well as Internet giant Google Inc. are all scheduled to report quarterly results later Thursday.

Overseas, most Asian markets declined in the wake of the Chinese growth report.

Hong Kong led Asia’s declines, with the Hang Seng falling 2% while Tokyo’s Nikkei 225 stock average gained 1.2%.

London’s FTSE 100 index was ahead 0.48%, Frankfurt’s DAX gained 0.73% while the Paris CAC 40 moved up 0.54%.

In Canadian earnings news, Canadian life science company MDS Inc. (TSX:MDS) has issued prelimary results for the fourth quarter, including a US$19-million loss from its continuing operations. Toronto-based MDS is in the process of selling most of its remaining business units but will keep MDS Nordion, best known for supplying medical isotopes to customers used around the world. It reports full earnings on Jan. 29.

Elsewhere on the corporate front, Kinross Gold Corp. (TSX:K) said Wednesday it has signed a deal to buy a property near its Kupol operation in Russia worth roughly US$360 million in cash and stock. The Toronto-based gold miner said the property includes the Dvoinoye deposit and the Vodorazdelnaya property, located approximately 90 kilometres north of Kinross’ Kupol project.

Inmet Mining Corp. (TSX:IMN) said Wednesday that copper production in 2009 was slightly below estimates, while zinc and gold production were both slightly higher than last estimated .The company said copper production fell short of expectations because lower than expected results from its Las Cruces project.