TSX to head lower

Suncor also announced its quarterly dividend will rise 54 per cent to 20 cents per share from 13 cents. It will also embark on a $2-billion share buyback.

The Canadian dollar was off 0.01 of a cent to 98.84 cents US ahead of the February reading for gross domestic product. The consensus calls for GDP to have edged up 0.2 per cent following a similar rise in January.

U.S. futures were flat as traders also awaited data on U.S. house prices and consumer confidence while taking in an earnings miss from pharmaceutical company Pfizer.

The Dow Jones industrial futures were off five points to 14,743 as the drugmaker said net income was US$2.75 billion, or 38 cents per share, down from $1.79 billion, or 28 cents per share, a year earlier.

Excluding one-time items, adjusted income was 54 cents per share.

Revenue was US$13.5 billion, down nine per cent from $14.89 billion a year earlier.

Analysts surveyed by FactSet, on average, expected adjusted earnings of 55 cents per share and sales of US$13.99 billion and Pfizer shares were down about three per cent in pre-market trading.

The Nasdaq futures dipped 0.5 of a point to 2,858.2 and the S&P 500 futures were down 1.5 points to 1,586.75.

Meanwhile, markets have become increasingly convinced that the U.S. central bank is in no hurry to end its current stimulus programs amid a combination of low inflation and modest U.S. economic growth.

The Fed has said it plans to keep its key short-term interest rate near zero at least until the unemployment rate dips below 6.5 per cent from its current 7.6 per cent.

It’s also been buying US$85 billion a month in Treasurys and mortgage bonds to try to keep long-term borrowing rates down, a move known as quantitative easing.

And expectations that the European Central Bank will cut its main interest rate from the already all-time low of 0.75 per cent grew Tuesday as new data showed eurozone unemployment up at another record high of 12.1 per cent.

Also, inflation rose 1.2 per cent in the year to April, way down on the 1.7 per cent rate recorded in March and markedly below market expectations for a modest decline to 1.6 per cent. It was also well below the ECB’s target of keeping inflation “close to but below” two per cent.

Meanwhile, the U.S. S&P Case-Shiller house price index is expected to jump 0.7 per cent in February, which would mark a 13th consecutive increase. Such a showing would lift the yearly rate to 8.6 per cent, the highest since the housing crash began in mid-2006.

Commodity prices also weakened following a string of advances as June crude on the New York Mercantile Exchange fell 71 cents to US$93.79 a barrel.

July copper on the Nymex slipped four cents to US$3.19 a pound while June gold bullion was down $1.50 to US$1,465.90 an ounce.

The pause on the TSX Tuesday would come after the main index ran ahead 109 points Monday following a 1.28 per cent gain last week. Bargain hunters had stepped up after the index tumbled over two per cent in the previous week on signs of slower than expected growth in China and a big retreat in gold prices.

In other earnings news, Thomson Reuters (TSX:TRI) reported a seven per cent decline in operating profit in the first quarter, citing severance costs and an increase in depreciation and amortization expenses.

The global news and information company said underlying operating profit was $462 million, with adjusted earnings of 38 cents per share.

European bourses were mixed as London’s FTSE 100 index moved down 0.07 per cent, Frankfurt’s DAX rose 0.62 per cent and the Paris CAC 40 declined 0.22 per cent.

Earlier, Asian stocks closed higher as Hong Kong’s Hang Seng rose 0.7 per cent, South Korea’s Kospi advanced 1.2 per cent and Australia’s S&P/ASX 200 added 1.3 per cent.

However, Japanese data showing only modest improvement in manufacturing dampened sentiment there with Nikkei 225 index dropping 0.2 per cent.