Source: The Canadian Press

The Toronto stock market appeared headed for a slightly lower open Thursday as gold prices backed off slightly from two days of strong advances while oil prices eased amid signs of rising U.S. inventories.

New York futures pointed to a slightly higher open with the Dow Jones industrial futures ahead 17 points to 10,893, the Nasdaq futures added 1.25 points to 1,974 and the S&P 500 futures up two points to 1,171.7.

The Canadian dollar was ahead 0.46 of a cent to 98.52 cents US.

The June bullion contract on the New York Mercantile Exchange faded $10.60 from to US$1,232.50 an ounce after investors worried about the future of the euro pushed gold to a record high of US$1,249.20 an ounce in intraday trading Wednesday.

Worries about weak economic growth across Europe have pushed the euro to a new 14-month low against the U.S. dollar as investors remain unsure if countries like Greece and Spain that are dealing with huge debt levels will be able to cut spending and still grow. The euro has lost about 12% of its value against the greenback since the beginning of the year.

On Thursday, the euro traded at around $1.2646 after spiking to a high of US$1.3048 on Monday, when the package of loans to be made available if struggling countries need them was announced.

The June crude contract on the Nymex was down 65 cents to US$75 a barrel as crude inventories keep rising, defying analyst predictions that a recovering U.S. economy would boost demand. The Energy Information Administration said Wednesday that oil supplies increased more than expected last week as stockpiles grow for 14 of the last 15 weeks.

The Toronto market is up 500 points or 4.3% so far this week as investors reacted enthusiastically to last weekend’s massive US$1 trillion financial rescue package from the European Union, which is designed to contain the debt crisis.

Markets were further reassured Thursday as Portugal announced tough austerity measures to cut its budget deficit by about $2 billion. Spain announced similar tough steps to reduce its huge budget deficit on Wednesday.

Earlier in Asia, Japan’s benchmark Nikkei 225 stock average rose 2.2% while China’s benchmark index in Shanghai jumped 2.1% as analysts predicted government measures to cool soaring property prices won’t undermine the banking system. Citigroup said residential real estate values will likely drop up to 25% from recent peaks, but that shouldn’t have much impact on bank mortgages or loans to developers.

Hong Kong’s Hang Seng added 1%.

London’s FTSE 100 index gained 0.65%, Frankfurt’s DAX was up 1.07% and the Paris CAC 40 moved ahead 0.36%.

On the earnings front, Cisco Systems disappointed investors even as the tech giant reported earnings and revenue that came in past analyst expectations. Its shares were down about 2% in pre-market trading in New York.

In Canada, clothing maker Gildan Activewear Inc. (TSX:GIL) reported that it had US$48.8 million or 40 cents per share of net income in its fiscal second quarter with US$326.8 million in sales. Full-year sales for 2010 will be US$1.3 billion — up 25% from 2009.

Paper and packaging producer Cascades Inc. (TSX:CAS) said it managed to break even in the first quarter through cost control and improved processes even though the paper and packaging company’s revenue continued to fall due to a stronger Canadian dollar. The company had zero net income attributable to shareholders and $942 million in revenue, which was down from both the prior quarter and the year-earlier period.

Elsewhere, Honeywell International Inc. (NYSE:HON) has a deal to take over Edmonton-based Matrikon Inc. (TSX:MTK) in a $145-million transaction. Honeywell is offering $4.50 cash per Matrikon share. The Canadian maker of industrial monitoring devices brings expertise in the energy and mining sectors.