The Toronto stock market headed for a lower open Tuesday with traders cautious amid mixed earnings reports and worries that negotiations to cut Greece’s debt could fall apart.
The Canadian dollar was down 0.39 of a cent to 98.88 cents US.
U.S. futures were weak with the Dow Jones industrial futures down 47 points to 12,603, the Nasdaq futures lost nine points to 2,426 and the S&P 500 futures declined 7.3 points to 1,303.8.
Buying sentiment was muted after the finance ministers of the countries that use the euro announced that Greece would pay less than four per cent interest on the new bonds creditors will get in a debt swap meant to cut what Greece owes by about €100 billion.
That interest rate is below what the creditors have been willing to accept.
A deal with creditors is crucial to Greece’s and the eurozone’s stability since it’s clear there’s no way Athens can ever pay back all that it owes. Banks that hold Greek debt have already been asked to take a 50% loss on those investments — and some think even that writedown isn’t big enough.
Time is running out as Greece has several billions of euros of debt coming due in March.
On the earnings front, Canadian National Railway Co. (TSX:CNR) (NYSE:CNI) announced it is raising its quarterly dividend by 15% to 37.5 cents per share, starting with the next payout in March. CN generated a profit of $592 million or $1.32 per diluted share in the fourth quarter of 2011, as revenue rose 12% from a year before to a record $2.38 billion. Its shares were up 1.5% in pre-market trading in New York.
U.S. chemicals giant DuPont Co. said Tuesday that fourth-quarter income dipped slightly to US$373 million or 40 cents a share as volume declines and cost increases offset sales gains and higher prices. Excluding one-time items, earnings per share were 35 cents, topping analysts’ expectations for earnings of 33 cents per share, according to FactSet. However, revenue missed expectations and its shares were down slightly in pre-market trading.
Health care products company Johnson & Johnson reported fourth-quarter net income slumped 89% to US$218 million or eight cents a share. Excluding special items, adjusted earnings per share were $1.13, four cents better than forecast. Sales narrowly missed expectations, coming in at $16.26 billion.
Kimberly-Clark Corp., the maker of Kleenex, Huggies and other household goods, reported that its fourth-quarter net income fell 19% to US$401 million or $1.01 a share as rising costs dampened its performance. Its 2012 adjusted earnings forecast was below Wall Street’s expectations and its shares fell 2.7% in pre-market trading.
Uncertainty over a Greek debt deal also depressed commodity markets where the March crude contract on the New York Mercantile Exchange lost 37 cents to US$99.21 a barrel.
Prices climbed over $1 Monday on concerns that Iran could block shipments of crude in the wake of the European Union’s decision to embargo imports of Iranian oil.
March copper slipped four cents to US$3.76 a pound while gold prices also fell with the February contract in New York down $12.20 to US$1,666.10 an ounce.
European markets headed lower with London’s FTSE 100 index down 0.88%, Frankfurt’s DAX dropped 1.18% and the Paris CAC 40 fell 1.05%.
Earlier in Asia, Japan’s Nikkei 225 stock rose 0.2% to 8,785.33 despite the central bank cutting growth forecasts for the fiscal year ending March 2012 and the following year because of a slowdown in overseas demand and the strong yen.
Australia’s S&P/ASX 200 closed little changed.