Source: The Canadian Press

The Toronto stock market will be balancing encouraging signs of growth in Europe with some disappointing retail data and earnings results at home Thursday.

European markets and futures in New York rose Thursday morning after an index of the eurozone’s manufacturing and service sectors showed the recovery gaining traction.

But Canadian investors will also have to weigh new data from Statistics Canada, which shows retail sales slipped 0.2% to $36 billion in May, much lower than the 0.4% gain that was anticipated.

Commodities were mixed, with the September crude contract on the New York Mercantile Exchange adding 44 cents to US$77 a barrel while the August bullion contract lost $6 to US$1,185.80 an ounce.

The September copper contract gained 5.45 cents to US$3.15 a pound.

The Canadian dollar edged higher, adding 0.22 cent to 95.67 cents US.

In New York, markets were poised to bounce back after a sell-off sent all major indexes lower on Wednesday.

Dow Jones industrial average futures were up 1%. S&P 500 index futures were up 1.1%, at 1,075.30, while Nasdaq 100 index futures were up 1%.

This followed news that the eurozone’s purchasing manager’s index, which combines data for the manufacturing and service sectors, rose to 56.6 in July from 55.6 in June. Anything above 50 indicates expansion and the higher the figure the greater the growth.

In recent months, investors worldwide have been concerned that mounting government debt in Europe would stall a global recovery. A jump in Europe’s purchasing managers index is welcome relief for those predicting contraction on the continent.

On top of this, a monthly 0.7% increase in British retail sales in June was a lot more than anticipated.

The better-than-expected numbers out of Europe combined with strong earnings from key companies like Caterpillar, 3M, UPS and AT&T, which all topped profit forecasts and raised their outlooks, and offset news that weekly jobless claims in the U.S. jumped more than expected last week.

American markets will look to data on home sales and house prices later this morning.

Second-quarter earnings are also beginning to drift in from Canadian companies.

Canfor Pulp Income Fund (TSX:CFX.UN) said Wednesday it earned $22.1 million in its latest quarter, up from $4.4 million a year ago, and increased its monthly distribution.

Forestry company Norbord Inc. (TSX:NBD) returned to profitability with net income of US$37 million as sales volumes and North American pricing improved along with the resurgence in construction activity.

Calgary-based Precision Drilling Corp. (TSX:PD) reported a net loss of $67 million, surprising analysts who had expected a small profit.

And the country’s largest grocery store operator, Loblaw Co., says its second-quarter profit of $180 million was down nearly 7% compared with the same time last year.

Overseas, Britain’s FTSE 100 rose 0.9%, Germany’s DAX index gained 1.6% and France’s CAC-40 rose 1.8%. Japan’s Nikkei stock average fell 0.6%.