The Canadian Press

The Toronto stock market appeared headed for a higher open Tuesday as commodity prices rose along with hopes the European Union will take steps to deal with a growing problem as several European governments struggle with their sovereign debt.

The Canadian dollar was up 0.64 of a cent to US93.71¢.

New York futures also indicated a positive start to the session with the Dow Jones industrial futures ahead 75 points to 9,970, the Nasdaq futures up 15.5 points to 1,750 and the S&P 500 futures up 9.3 points to 1,065.2.

Stock markets have lost ground recently over worries about unsustainable debt loads taken on by some European countries, particularly Spain, Portugal and Greece. Markets doubt that governments have the political will necessary to impose austerity measures to get huge deficits under control.

And although the European Investment Bank said Tuesday it would not be able, according to its own rules, to offer Greece or any other country a bailout, investors are betting that a meeting on Thursday of EU heads of state will address the market’s worry about sovereign debt.

“This meeting of EU leaders is set to discuss the economic road map of the eurozone for the next 10 years; however it is difficult to see how the problems of Greece and other vulnerable indebted nations won’t overshadow the summit,” said Michael Hewson, analyst at CMC Markets.

He said a bailout would be very problematic, since that would urge other heavily-indebted countries to seek the same treatment.

Meanwhile, oil prices headed higher as a weakening U.S. dollar offset concerns about the strength of the global economic recovery. The March crude contract on the New York Mercantile Exchange was up 91¢ to US$72.80 a barrel.

Husky Energy Inc. (TSX:HSE) will be watched at the open after the company announced its third significant discovery in the South China Sea. The Calgary-based company said Monday that an exploration well in the waters south of Hong Kong tested natural gas at an equipment restricted rate of 57 million cubic feet per day, with indications the Liuhua 29-1 well could produce more than 90 million cubic feet of gas per day in the future.

The April gold bullion contract on the Nymex climbed $11.20 to US$1,077.40 an ounce while March copper added 4¢ to US$2.95 a pound.

Investors also took in major earnings reports from the commodity sector.

Teck Resources Ltd. (TSX:TCK.B) said Monday it earned $411 million in its latest quarter as revenue increased 35% compared with a year ago, helped by sharply higher copper and zinc revenue but offset by lower coal prices. The mining company said its profit amounted to 70¢ per diluted share for the quarter ended Dec. 31 compared with a loss of $607 million or $1.27 per diluted share a year ago.

And fertilizer producer Agrium Inc. (TSX:AGU) reported fourth-quarter profit came in at US$30 million, down sharply from US$124 million a year earlier when it and other fertilizer producers were still reaping the rewards of strong demand and high prices. Agrium’s net sales fell to US$1.44 billion in the fourth quarter of 2009, down from US$1.94 billion in the comparable period of 2008.

Western Coal Corp. (TSX:WTN) said its quarterly profit fell to $24 million or 9¢ per diluted share in the three months ended Dec. 31. That was down from a profit of $62.5 million or 29¢ per share in the year-earlier period. Revenue fell to $118.7 million from $176.6 million in the final three months of 2008.

Overseas, Tokyo’s Nikkei 225 stock average lost 0.2%.

Chinese markets fared better, but trading has been listless as investors hunkered down ahead of a week-long closure of mainland exchanges for next week’s Lunar New Year holiday. The benchmark Shanghai Composite Index gained 0.5% and Hong Kong’s Hang Seng index advanced 1.2%.

London’s FTSE 100 index was ahead 0.42%, Frankfurt’s DAX gained 0.24% while the Paris CAC 40 advanced 0.06%.