The Toronto stock market looked set for a flat open Thursday with buyers inclined to caution after European leaders ended their one-day summit no closer to dealing with the worsening government debt crisis.

Traders also took in mixed earnings reports from two of the big Canadian banks.

TD Bank Group (TSX:TD) reported a profit of $1.69-billion or $1.78 before adjustments, up 21% from a year ago, largely driven by the bank’s North American retail business.

After adjustments, the bank’s net income was $1.73 billion or $1.82 a share, four cents above estimates.

Royal Bank of Canada (TSX:RY) said its second-quarter profit from continuing operations was $1.56 billion or $1.01 a share, but would have been higher without a loss associated with its acquisition of the remaining half of RBC Dexia.

Excluding certain items, Royal Bank earned $1.17 a share, a penny short of expectations.

The Canadian dollar was slightly lower, down 0.02 of a cent to 97.62 cents US.

U.S. futures were positive ahead of the weekly reading on jobless insurance claims with the Dow Jones industrial futures ahead 30 points to 12,496, the Nasdaq futures gained eight points to 2,548.5 while the S&P 500 futures climbed 3.6 points to 1,319.3.

Markets have been under selling pressure this month on worries that Greece could be forced to leave the eurozone, particularly if parties opposed to further austerity measures gather more support in next month’s election.

But political uncertainty in Greece is just one of the fires the Europe needs to put out. Leaders are also worried about rising borrowing costs in Spain and Italy that could force them to seek bailouts, just like Greece, Portugal and Ireland did.

Commodity prices advanced even as HSBC Corp. said Thursday its Purchasing Managers Index based on a survey of Chinese manufacturers showed activity weakened further in May.

A preliminary PMI, based on responses by 85 to 90% of companies surveyed for the full index which is released later, fell to 48.7 from April’s 49.3 on a 100-point scale. Numbers below 50 indicate a contraction.

The weak showing came a day after China’s Cabinet promised to step up efforts to reverse a steep slowdown in the world’s second-largest economy and said it would encourage private investment in energy and other state-dominated industries.

There were also mounting signs of a deep recession in the eurozone.

The monthly purchasing managers index from Markit, a gauge of business activity, fell to 45.9 in May from 46.7 in April. The fall was bigger than the expected decline to 46.5. Anything below 50 indicates a contraction.

“So while Europe did manage (by the skin of its teeth) to avoid the recession label in Q1 (thanks to Germany), it won’t be able to avoid it in Q2,” said BMO Capital Markets senior economist Jennifer Lee.

The July crude contract on the New York Mercantile Exchange gained 74 cents to US$90.64 a barrel after closing below $90 Wednesday for the first time since the end of October.

The July copper contract on the Nymex rose five cents to US$3.44 a pound and the June bullion contract in New York gained $18.60 to US$1,567 an ounce.

The TSX racked up strong, triple-digit gains over the last two sessions as some investors thought the market was looking oversold after plunging as much as 1,000 points from the beginning of this month.

Even after those two days of gains, the TSX is down 9.2% from its highs of late February and down 6.2% for this month alone on worries about the eurozone and a slowing global economy.

European bourses were higher after registering sharp losses Wednesday with London’s FTSE 100 index ahead 1.56%, Frankfurt’s DAX gained 0.81% and the Paris CAC 40 climbed 0.98%.

Earlier in Asia, Japan’s benchmark Nikkei 225 closed marginally higher while Hong Kong’s Hang Seng fell 0.6% and South Korea’s Kospi ended up 0.3%.

In other earnings news, ATS Automation Tooling Systems Inc. (TSX:ATA) reported fourth-quarter profit from continuing operations of C$10.9 million or 13 cents per share. That was down from a profit of $14.4 million or 17 cents per share from continuing operations in the same 2011 period.

In the U.S., luxury retailer Tiffany & Co. said that its net income amounted to US$81.5 million, or 64 cents per share in the quarter ended April 30. That compares with $81.1 million, or 63 cents per share, a year ago.

Worldwide revenue rose almost eight per cent to $819.2 million in the quarter.