The Toronto stock market headed for a flat open Tuesday amid little movement in commodity prices and ahead of the release of a key reading on American consumer confidence later in the morning.
The Canadian dollar was down 0.13 of a cent to 100.76 cents US following a jump of about 3/4 of a cent on Monday.
U.S. futures were little changed with the Dow Jones industrial futures off two points to 13,198, the Nasdaq futures dipped 0.2 of a point to 2,776.8 and the S&P 500 futures eased 0.4 of a point to 1,414.7.
Markets in Toronto and New York netted strong gains and the greenback weakened Monday after U.S. Federal Reserve chairman Ben Bernanke said that the U.S. job market was still weak despite three months of job gains in excess of 200,000. Bernanke’s comments were a strong indication that the central bank is prepared to keep its low-interest rate policies in place for some time to come despite the recent signs of economic growth.
Traders also interpreted his remarks to suggest that the Fed could launch another round of buying bonds.
The Fed has already embarked on two rounds of bond-buying, most recently in late 2010, known as quantitative easing. The mere thought that a third round of bond-buying, dubbed QE3 by industry insiders, might be possible was all it took for markets to respond.
Commodity prices also responded positively to Bernanke’s comments but on Tuesday, the May crude contract on the New York Mercantile Exchange declined four cents to US$106.99 a barrel.
Copper prices declined three cents to US$3.86 a pound after jumping eight cents Monday. Bullion prices added slightly to Monday’s $23 rise, up $1 to US$1,686.60 an ounce.
On the economic front, traders will focus on the U.S. Conference Board’s latest take on consumer confidence. Economists expect little change in its index.
“The Conference Board’s confidence numbers will do very well to maintain last month’s big six-point gain,” said BMO Capital Markets economist Alex Koustas.
“We expect a flat reading of 70.8 to be a positive — its highest level in over a year.”
Traders will also digest the influential Case-Schiller report on U.S. house prices. It is expected to show a 0.1% seasonally adjusted dip for January.
Prices have slipped three per cent over the past five months “as the market continues to churn through an inventory of foreclosed homes, though prices are declining at a slower rate,” added Koustas.
In corporate news, pipeline builder Enbridge Inc. (TSX:ENB) is investing almost $3.8 billion in a new round of construction to bring oilsands crude to the U.S. Gulf and help ease a bottleneck that has led to a glut of supply in the Midwest. It will expand its Flanagan South Pipeline from Flanagan, Ill. to Cushing, Okla. to a 36-inch diameter line with a capacity of 585,000 barrels per day. Enbridge also said it will twin a jointly owned Seaway Pipeline from Cushing to the U.S. Gulf Coast at Houston.
Mining company Rio Tinto PLC says it is examining options for potentially disposing of its diamond businesses. Rio Tinto operates a diamond mine 300 kilometres northeast of Yellowknife. It also has mining operations in Australia and Zimbabwe and has a diamonds project in India. Harry Kenyon-Slaney, chief executive of the company’s diamonds and minerals division said the company was reviewing whether diamonds fit with its strategy of operating large, long-life, expandable assets.
British Columbia miner Copper Mountain Mining Corp. (TSX:CUM) booked $44.7 million of revenue in its fourth quarter, bringing the total for the year to $66.5 million. It’s the first year that Copper Mountain has booked revenue from operations.
The Vancouver-based company had $5.6 million of net earnings attributable to shareholders, or six cents per share, for the quarter ended Dec 31. For the full year, the net loss was $12.7 million or 13 cents per share.
European bourses were mixed with London’s FTSE 100 index down 0.11%, Frankfurt’s DAX gained 0.41% and the Paris CAC 40 slipped 0.29%.
Asian stock markets posted solid gains overnight in the wake of Bernanke’s comments, led by Japan’s Nikkei 225 index. The benchmark jumped 2.4% to close at 10,255.15, its highest finish since a devastating earthquake and tsunami on March 11, 2011.
South Korea’s Kospi rose one per cent, Hong Kong’s Hang Seng climbed 1.8% and Australia’s S&P/ASX 200 added 0.9%.