TORONTO — Oil and mining stocks will likely support the Toronto stock market at the open amid rising crude and copper prices.
But government debt will continue to cast a shadow over trading because of concern that Europe's debt crisis could swallow Italy and Spain and that the U.S. won't raise its debt ceiling in time to avoid a default.
The Canadian dollar moved higher ahead of the Bank of Canada's announcement on interest rates, up 0.43 of a cent to 104.72 cents US. The central bank is widely expected to leave its key rate unchanged at one per cent.
Analysts think the central bank is unlikely to provide clues about when it will resume hikes because of the current wave of uncertainty.
U.S. futures signalled a positive start to trading amid well-received earnings reports from the likes of IBM, Coca Cola and Bank of America. The Dow futures gained 75 points to 12,403, the Nasdaq futures rose 18 points to 2,358 and the S&P 500 futures were ahead 8.25 points to 1,308.75.
IBM raised its full-year profit guidance and said its quarterly earnings rose eight per cent to US$3.66 billion, or $3 per share. Excluding items, IBM earned $3.09 per share, ahead of the $3.02 per share analysts expected. Guidance for 2011 calls for at least $13.25 per share, excluding items, up from the previous estimate of $13.15 per share and IBM shares were up about 1.5 per cent in pre-market trading.
Coca-Cola Co.'s second-quarter net income rose 18 per cent to US$2.8 billion of $1.20 a share, five cents better than forecasts. Its shares rose 1.3 per cent in pre-market trading.
Bank of America shares were up 0.5 per cent in pre-market trading even as the institution reported a quarterly loss of US$9.1 billion or 90 cents a share. The showing was partly due to the $8.5 billion settlement with investors who claimed the bank had sold them poor-quality mortgage backed bonds. Excluding those charges, Bank of America earned US$3.7 billion, or 33 cents per share. Analysts had forecast a loss of 85 cents per share.
Oil prices rose above $96 a barrel Tuesday amid a survey by Platts, the energy information arm of McGraw-Hill Cos., that crude inventories likely fell by 1.3 million barrels last week while gasoline supplies probably dropped 450,000 barrels.
The August crude contract on the New York Mercantile Exchange gained $1.02 to US$96.95 a barrel.
Metal prices also ran ahead with the September copper contract up six cents to US$4.46 a pound.
Gold prices dipped from Monday's latest record close, down $1.40 to US$1,601 an ounce. Nervous investors have pushed gold to a series of record highs recently because of the European debt crisis and inflation worries.
The main point of interest this week will likely be Thursday's meeting of European Union leaders in Brussels. They are due to discuss a second bailout package for Greece, which relies on such lifelines to meet its obligations.
Meanwhile, Spain has been forced to pay sharply higher interest rates in two short-term debt auctions. The Treasury sold euro3.9 billion in 12-month bills Tuesday with the average interest rate jumping to 3.7 per cent from 2.7 per cent in the last such auction June 14.
Spain, with 21 per cent unemployment and a swollen deficit, has seen its borrowing costs climb recently amid waning investor confidence it can manage its debt.
Earlier, Japan's Nikkei 225 stock average declined 0.9 per cent, Hong Kong's Hang Seng gained 0.5 per cent while mainland China's Shanghai Composite Index fell 0.7 per cent.
European bourses were positive with London's FTSE 100 index up 0.29 per cent, Frankfurt's DAX gained 1.12 per cent and the Paris CAC 40 climbed 1.22 per cent.
