TSX heads for lower open amid falling commodities

U.S. futures were negative with the Dow Jones industrial futures down 32 points to 12,358, the Nasdaq futures slipped 7.8 points to 2,355.8 while the S&P 500 declined 4.5 points to 1,281.6.

The Fed releases its so-called Beige Book mid-afternoon, which is a snapshot of economic conditions from across the country. Traders hope the data will reinforce the belief that the U.S. will be able to avoid slipping back into recession.

Recent economic reports have raised hopes — data released just in the last week showed manufacturing expanding at a faster than expected pace while employment gains for December beat expectations.

Oil prices were lower as the European Union’s efforts to block imports of Iranian oil appear to be stalling.

Tension between Iran and Western powers over Iran’s nuclear program has helped keep crude above US$100. However, prices edged down Wednesday after the EU’s plan to ban purchases of Iranian oil in hopes of choking off funding for the country’s nuclear program were bogged down by issues such as exemptions for existing supply contracts.

The February crude contract on the New York Mercantile Exchange lost 75 cents to $101.49 barrel.

Metal prices also weakened with March copper down a penny to US$3.51 after running ahead 10 cents on Monday as weak trade data from China raised hopes that officials will loosen lending requirements to encourage growth but in a limited way to prevent inflaming its already sizzling property market.

Traders were also encouraged by strong revenue figures and a positive outlook from resource giant Alcoa Inc.

Bullion prices headed higher for a second day as February gold gained $5.60 to US$1,637.10 an ounce.

There was also another dose of glum news related to the eurozone’s debt crisis.

Greece’s budget deficit is expected to hit 9.6% of economic output in 2011, about half a percentage point above target, the development minister acknowledged Wednesday.

Greece is relying on billions in rescue loans from its European partners and the International Monetary Fund to keep afloat.

The country’s interim coalition government is now rushing to pass a new batch of reforms and cutbacks to secure a second C130 billion bailout package approved in October but not yet finalized.

Fitch Ratings said on Wednesday that Greece’s financial troubles could still worsen the eurozone crisis if it could not work out a debt reduction deal with creditors, part of the second bailout package.

Hopes that China will tweak its monetary policy to encourage growth helped push Asian markets higher.

Japan’s Nikkei 225 index rose 0.3%, Hong Kong’s Hang Seng index gained 0.8% Australia’s S&P ASX 200 added 0.9% and South Korea’s Kospi fell 0.4%.

Mainland China’s benchmark Shanghai Composite Index lost 0.4% while the Shenzhen Composite Index was marginally lower. Inflation data was expected out of China on Thursday.

European markets were in the red with London’s FTSE 100 index was off 0.58%, Frankfurt’s DAX shed 0.43% and the Paris CAC 40 dipped 0.09%.

On the corporate front, Magna International Inc. (TSX:MG) is raising sales predictions by as much as eight per cent in 2012 as the auto parts maker looks to new markets for growth. Magna also said Wednesday that operating margins are targeted at about five per cent, an improvement over the scaled back predictions of 4.75% made for 2011.

Hostess Brands Inc., the maker of Twinkies and Wonder Bread, is filing for bankruptcy protection, blaming troubles with its pension and medical benefits obligations, increased competition and tough economic conditions. The Chapter 11 filing on Wednesday comes just two years after a predecessor company emerged from bankruptcy proceedings.

Canmarc Real Estate Investment Trust (TSX:CMQ.UN) said it has struck deals to acquire two retail properties in Toronto and Jonquiere, Que., as well as the 50% interest in Calgary’s Scotia Centre office and retail complex it does not already own. The pricetag of Wednesday’s deals by Canmarc, which is fighting off a hostile takeover bid by rival Cominar, is $213 million.