Source: The Canadian Press

The Toronto stock market headed for a positive open Tuesday as commodity prices started to rebound from losses caused by worry that Europe could be headed for a severe downturn.

U.S. futures also pointed to a higher start to the day’s trading with the Dow Jones industrial futures ahead 55 points to 10,654, the Nasdaq futures gained 10 points to 1,9223.5 while the S&P 500 futures were ahead 6.9 points to 1,141.4.

Oil prices advanced after a two-week selloff sparked by fears that a European debt crisis could halt a global economic recovery. The June crude contract on the New York Mercantile Exchange was up $2.18 to US$72.26 a barrel after falling 2% on Monday to a three month low.

A surging American dollar against the euro has helped drag down the price of oil and other commodities priced in U.S. dollars.

Copper prices advanced after worries that China may tighten lending and slow the economy also helped push the metal sharply lower for the past two sessions. On Tuesday, the July contract on the Nymex gained eight cents to US$3.01 a pound.

However, the TSX could be under pressure from gold stocks as the precious metal backed further away from Friday’s record intraday high of just under US$1,250 an ounce. The June bullion contract in New York fell $19.60 to US$1,208.50 an ounce.

North American markets racked up sharp losses for a third session in a row Monday as a US$1 trillion bailout package unveiled last week by the European Union and International Monetary Fund has failed to assuage investor concern about the government debt crisis.

The TSX has lost almost 400 points over the past three sessions.

The package has served to raise concerns that deep government spending cuts and spiralling higher debt obligations will choke off economic growth and demand for oil and other commodities.

Meanwhile, Greece is to receive euro14.5 billion (US$17.9 billion) in bailout loans from other European Union countries Tuesday, helping stave off default on around euro9 billion of debt due a day later.

Investor nervousness has also driven the U.S. dollar higher and the euro to a four-year low on Monday. On Tuesday, the euro was at US$1.2435, up from US$1.2382 late Monday.

The Canadian dollar also moved higher, up 0.7 of a cent to 97.44 cents US.

Earlier in Asia, the Shanghai Composite index jumped 1.4%, bouncing back from losses earlier in the session. Hong Kong’s Hang Seng index gained 1.2% while Japan’s Nikkei 225 stock average rose 0.1%.

London’s FTSE 100 index gained 0.86% even as European Union governments override British objections by agreeing on tighter oversight for hedge funds, a lucrative industry for London’s financial district. Finance ministers are proposing rules that don’t give funds the automatic right to sell across the 27-nation bloc.

Frankfurt’s DAX was up 1.26% while the Paris CAC 40 moved ahead 2.25%.

In corporate news, Home Depot Inc.’s fiscal first-quarter net profit surged 41% to US$725, a positive sign for the world’s largest home improvement retailer as consumers cut back on home-improvement projects during the recession and housing slump.

Revenue rose 4.3% to US$16.86 billion from US$16.18 billion. Revenue at U.S. stores open at least a year climbed 3.3%, while revenue at all of the retailer’s stores open at least a year increased 4.8%.

And Wal-Mart Stores turned in quarterly earnings of 88 cents a share, three cents a share above analyst expectations. But same store sales were down 1.4%, excluding fuel sales. Its shares were up slightly in pre-market trading.

Canadian National Railway Co. (TSX:CNR) said Monday it plans to buy back up to three million of its shares in a private deal with an arm’s-length third-party seller. The company said the price paid will be negotiated with the seller, but it will not be more than the prevailing market price at the time of the purchase.