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TSX heads for lower open amid further signs of slowing Chinese economy(Canadian Press DataFile Via Acquire Media NewsEdge) By Malcolm Morrison TORONTO _ The Toronto stock market headed for a negative open Thursday as commodity prices declined in the wake of data showing a slowdown in Chinese manufacturing. Traders also watched for progress on the U.S. government debt limit and Europe's debt crisis. The Canadian dollar was little changed, up 0.05 of a cent to 105.6 cents US after earlier going as high as 105.84 cents, its highest level since the end of November, 2007. U.S. futures pointed to a flat open with the Dow Jones industrial futures up two points to 12,509, the Nasdaq futures were down 5.75 points to 2,376 and the S&P 500 futures added 0.25 of a point to 1,321.5. Prices for oil and copper fell back amid data showing that Chinese manufacturing activity fell to a 28-month low in July following repeated rate hikes and other measures to cool an overheated economy. HSBC Corp.'s manufacturing index fell to 47.2 from June's 50.1 on a 100-point scale on which numbers below 50 show activity declining. The Chinese economy has had a huge appetite for commodities, which in turn have lifted prices for oil and copper and resource stocks on the Toronto stock market. The September crude contract on the New York Mercantile Exchange dipped 30 cents to US$98.10 a barrel. The September copper contract on the Nymex was off six cents to US$4.36 a pound. Gold prices advanced after two days of declines, up $2.50 to US$1,599.40 an ounce. Meanwhile, a top eurozone official says European Union leaders are ready to sign off on a second bailout for Greece even at the potential cost of putting the country into default. After Germany and France shelved a plan to levy a tax on the banks, investors are worried that an alternative way of getting banks involved in the second bailout of Greece will prompt credit rating agencies to slap a default rating on Greece. The worry is that plans to give Greece more time to repay its bonds to banks and other private investors could potentially threaten Greece's banking system and spark renewed concerns that much bigger economies such as Spain and Italy will get dragged into Europe's debt crisis mire. Traders have also been looking to American lawmakers to find a way to get the U.S. debt limit raised and avoid a debt default before an Aug. 2 deadline. Momentum on a separate bipartisan budget plan by the Senate's so-called "Gang of Six" seemed to ebb Wednesday. Critics warned the measure contains larger tax increases than advertised. In Asia, Japan's Nikkei 225 closed up less than 0.1 per cent, China's Shanghai Composite Index lost one per cent while Hong Kong's Hang Seng closed down 0.1 per cent. European markets were mixed as London's FTSE 100 index dipped 0.24 per cent, Frankfurt's DAX was down 0.11 per cent while the Paris CAC 40 added 0.42 per cent. In earnings news, Loblaw Companies Ltd. (TSX:L) said its second quarter earnings grew 8.8 per cent to $197 million or 70 cents per share, from $181 million or 65 cents per share a year earlier. Revenue was relatively flat at $7.28 billion, compared to $7.27 billion. Energy giant Encana Corp. (TSX:ECA) rose to a second quarter profit of $176 million, turning around a $457 million loss posted at the same time a year earlier and beating analyst expectations. Mobile phone maker Nokia Corp. on Thursday posted a loss of euro368 million (US$523 million) in the second quarter and for the first time was overtaken by Apple's iPhone in smartphone shipments. A year ago, Nokia posted a profit of euro227 million. Revenue in the most recent quarter fell seven per cent to euro9.3 billion. (c) 2011 The Canadian Press |