The Toronto stock market headed for a lower open with traders risk averse amid worries about growing Russian troop strength on its border with Ukraine and data showing Italy unexpectedly has fallen back into recession.
The Canadian dollar was down 0.13 of a cent to 91.11 cents US as nervous investors bought into the U.S. currency and sent gold prices higher.
New York futures were also lower as the Dow Jones industrial futures fell 59 points to 16,307, the Nasdaq futures lost 20.5 points to 3,851.3 and the S&P 500 figures were down seven points to 1,906.
Geopolitical worries were front and centre again Wednesday after news reports of a buildup of Russian troops on the Ukraine border. Stock markets had closed lower Tuesday after Poland’s prime minister said he has information indicating that there is a growing threat of a “direct intervention” by Russia in Ukraine.
In addition, Russian president Vladimir Putin has told his government to prepare retaliatory measures against sanctions that have been levied by the U.S. and the EU for his country’s support of Ukrainian rebels.
Meanwhile, data showed that Italy’s gross domestic product contracted 0.2 per cent in the second quarter, which added to a negative showing in the first quarter, meaning the country is in technical recession.
On the commodity markets, September crude was ahead 13 cents to US$97.51 a barrel.
December bullion was ahead $9.70 to US$1,295 an ounce while September copper dropped five cents to US$3.16 a pound.
It is also a busy day for corporate earnings in Canada.
Tim Hortons (TSX:THI) reported that quarterly profits were flat at $123.8 million or 92 cents a share versus $123.7 million or 81 cents a year earlier, benefiting from a share repurchase program announced last summer. Same-store sales grow 2.6 per cent in Canada and 5.6 per cent in the United States. The restaurant chain also anticipates earnings per share to be near the higher end – or slightly above – its current target range of $3.17 to $3.27 earnings per share for the year.
Athabasca Oil Corp. (TSX:ATH) lost $56.8 million, or 14 cents per share, in the second quarter after the Calgary-based company set aside $49 million for a potential settlement of some claims made by Phoenix Energy Holdings Ltd., a company owned by PetroChina Co. Ltd. A year earlier losses were $30 million or seven cents per share.
Insurers Sun Life Financial (TSX:SLF) and Great-West Lifeco (TSX:GWO) also post earnings during the day.
Overseas, Fiat shares were suspended temporarily on the Milan stock exchange after an excessive drop due to investor concerns that a planned merger with Chrysler may be blocked. Shareholders voted last Friday to approve a merger with Chrysler but one important hurdle remains. Italian law gives dissenting shareholders the right to cash out. There are concerns the payout would exceed Fiat’s 500-million euro cap.