Source: The Canadian Press

The Toronto stock market headed for a lower open on Monday as investors turned cautious amid reports Portugal is facing mounting pressure to accept a bailout.

The Canadian dollar failed to benefit from rising oil prices as traders bought into to the safe-haven status of the U.S. currency. The loonie declined 0.52 of a cent to 100.31 cents US.

There was also some major merger and acquisition activity to kick off the trading week.

HudBay Minerals Inc. (TSX:HBM) said it has reached an agreement to acquire Norsemont Mining Inc. (TSX:NOM) in a cash and share transaction valued at $520 million. The purchase will give the Canadian base metals miner full ownership of the Constancia copper project in southern Peru.

HudBay said the acquisition is expected to help boost its copper production by about 145 per cent between 2011 and 2016.

U.S. futures were lower as investors also look ahead to the kickoff of the American fourth-quarter earnings season. Aluminum giant Alcoa Inc. reports after the market close.

The Dow Jones futures lost 42 points to 11,577, the Nasdaq futures fell 8.25 points to 2,265 and the S&P 500 futures were down 5.8 points to 1,262.

German newspaper Der Spiegel reported that France and Germany are pressing Portugal to tap a European rescue fund to keep the sovereign debt crisis from spreading to much-bigger Spain. Portugal denies it needs to do so.

At the same time, the yield on Portugal’s ten-year bonds rose nearly half a percentage point to 7.14%. That’s unsustainable in the medium-term and comes ahead of an auction of 1.25 billion euros in three year and nine year bonds on Wednesday.

Oil prices rose despite the rising greenback after a pipeline leak cut Alaskan crude output.

The February crude contract on the New York Mercantile Exchange gained 91 cents to US$88.94 a barrel after the 1,300-kilometre trans-Alaska pipeline was shut Saturday after a leak was discovered at a North Slope pump station, said Alyeska Pipeline Service Co., which manages the line. North Slope production was reduced to 5% of the 630,000 to 650,000 barrels that the pipeline normally carries.

Alyeska Pipeline said cleanup crews have contained the leak, but the company didn’t know when the pipeline would restart operations.

Metal prices moved lower with the March copper contract on the Nymex down one cent to US$4.27 a pound while the February gold contract in New York eased $1.10 to US$1,367.80 an ounce.

Earlier in Asia, China’s Shanghai Composite index fell 1.7%, while Hong Kong’s Hang Seng dropped 0.7% and South Korea’s benchmark Kospi fell 0.3%.

Financial markets in Japan were closed Monday for a national holiday.

European bourses were lower amid the latest developments in the government debt crisis with London’s FTSE 100 index down 0.44%.

The Frankfurt DAX was down 1%t and the Paris CAC 40 slipped 1.47%.

In other corporate news, investment management company Sprott Inc. (TSX:SII) has declared a special dividend of 60 cents per common share for the year ended Dec. 31, 2010, and expects a second payment in the near future.

Pacific Rubiales Energy Corp. (TSX:PRE) said its production volume at the end of 2010 was 8% below the company’s projections as a result of transportation issues that are being resolved. The company also announced it has a 2011 capital budget of US$1.12 billion, which will be used to boost production from its current assets and accelerate addition of new reserves.