Source: The Canadian Press

The Toronto stock market headed for a lower open Friday amid weak commodity prices and data showing modest economic growth in Canada and the United States.

Statistics Canada reported that gross domestic product in August rose 0.3% following a 0.1% drop in July.

The Canadian dollar moved higher following the report, up 0.35 of a cent to 98.25 cents US.

In the U.S., gross domestic product grew at a meagre 2%annual rate during the third quarter, which is far short of what would be needed to reduce the high unemployment rate.

However, the 2% growth rate marked a small improvement from the 1.7% rate reported by the United States during the second quarter.

Investors expect the latest reading of U.S. economic growth to reinforce views that the Federal Reserve will provide further stimulus.

The U.S. central bank is expected to buy Treasury bonds, through a process known as quantitative easing, to stimulate the U.S. economy.

“The market remains fixated on the size of the quantitative easing,” Singapore’s DBS bank said in a report.

DBS said it expects the Fed to announce initial bond purchases of between US$200 billion and US$300 billion while some investors are looking for a program between US$500 billion and US$1 trillion.

“Herein lies the fear for disappointment,” DBS said.

The details of any stimulus are expected to be announced when the Fed meeting wraps up Nov. 3.

U.S. futures pointed to a lower market open ahead of the release of the GDP data with the Dow Jones industrial average down 14 points to 11,035, the Nasdaq futures dipped 2.5 points to 2,123 and the S&P 500 futures declined 3.6 points to 1,176.

Caution ahead of next week’s Federal Reserve meeting and U.S. midterm elections depressed oil prices, with the December crude contract on the New York Mercantile Exchange down 27 cents to US$81.91 a barrel.

December gold on the Nymex gained $5.80 to US$1,348.30 an ounce while December copper fell seven cents to US$3.73.

In Asia, the Nikkei 225 stock average closed down 1.8% amid data showing that Japan’s industrial production fell for the fourth straight month in September, underscoring the country’s fragile recovery. Factory output tumbled 1.9% from the previous month as makers of cars and electronic devices cut production, much worse than a 0.6% fall forecast by analysts.

South Korea’s Kospi lost 1.3%, China’s benchmark Shanghai Composite Index dropped 0.5% and Hong Kong’s Hang Seng shed 0.5%.

London’s FTSE 100 index dipped 0.16%, Frankfurt’s DAX dipped 0.04% and the Paris CAC 40 added 0.12%.

It’s a relatively quiet day for earnings reports after investors digested a mixed bag this past week by several corporate heavyweight.

On Friday, paper and wood products producer Domtar Corp (TSX:UFS) reported $191 million or $4.44 per share of net income in the third quarter, with $1.47 billion of sales. Adjusted income was $4.26 per share, which was ahead of analyst estimates.

And aircraft parts maker Heroux-Devtek Inc. (TSX:HRX) reported second quarter net income fell to $2.6 million, or eight cents per share, from $3.5 million, or 11 cents per share, a year ago. Consolidated sales rose to $83.2 million from $76.6 million.

On Thursday after the market close, Microsoft Corp. said its profit jumped because businesses increased their spending on technology.

Microsoft’s net income rose 51% to US$5.4 billion, or 62 cents per share, from US$3.6 million, or 40 cents per share, in the same period last year.

Revenue increased 25% to US$16.2 billion, from US$12.9 billion a year ago.

Fairfax Financial Holdings Ltd. (TSX:FFH) reported a drop in quarterly profit compared with a year ago as the company saw lower investment gains. The insurance and investment management firm, which keeps its books in U.S. dollars, earned US$219 million or $10.24 per diluted share for the quarter ended Sept. 30 compared with a profit of $562.4 million or $30.88 per diluted share a year ago. Revenue totalled $1.68 billion, down from $2.2 billion.