Source: The Canadian Press
The Toronto stock market headed for a weak open Monday with little change in oil and metal prices while investors look ahead to some important economic data.
The Canadian dollar slipped 0.05 of a cent to 97.94 cents US.
U.S. futures indicated a slightly lower open as the Dow Jones industrial futures lost 22 points to 10,746, the Nasdaq futures were down 4.75 points to 1,989.75 while the S&P 500 futures dipped 3.3 points to 1,139.
Oil prices were little changed after signs of falling U.S. inventories sent prices up about 7% over the last three sessions. The November crude contract on the New York Mercantile Exchange was off 15 cents to US$81.43 a barrel.
The December bullion contract on the Nymex stepped back 40 cents from Friday’s latest record high close to US$1,317.40 an ounce.
And the December copper contract was unchanged near two year highs at US$3.69 a pound.
Prices got a lift last week from strong Chinese manufacturing data.
On Monday, traders looked ahead to readings on August factory orders and pending home sales in the U.S.
Factory orders likely fell 0.4% in August according to economists polled by Thomson Reuters largely because of plummeting aircraft orders. Excluding the volatile aircraft sector, orders likely rose 3%, which is a steep retreat from the 5.2% growth seen in July.
Meanwhile, the number of buyers that signed contracts to purchase homes in August likely crept higher, but remains at very weak levels. Economists predict the National Association of Realtors pending home sales index rose to 81.4 in August from 79.4 in July.
The most anticipated economic data of the week are employment data for the U.S. and Canada, which come out on Friday.
U.S. expectations are modest with economists expecting that only 5,000 jobs were created during September with the jobless rate edging up a tenth of a point to 9.7%.
“Continued deterioration in U.S. economic data would reinforce the already negative sentiment surrounding the (U.S.) dollar, and this Friday’s U.S. employment and payrolls report for September, should offer clues as to whether or not the U.S. economy is starting to turn around,” said Michael Hewson, market analyst at CMC Markets.
In Canada, economists forecast that the economy created about 10,000 jobs last month.
Corporate earnings will also be in focus later in the week with aluminum giant Alcoa Inc. kicking off the third quarter earnings season in the U.S. after the close on Thursday.
The slow start to October trading comes after a strong showing on stock markets during September as fears of a double dip recession receded. The Dow Jones industrials ran up about 8% on the month, the S&P 500 index up nearly 9% and the S&P/TSX about 3.5%.
Hong Kong’s Hang Seng index jumped 1.2% while South Korea’s Kospi rose 0.1% and Australia’s S&P/ASX 200 added 1%. Financial markets in mainland China are closed through Oct. 7 for the National Day holidays.
London’s FTSE 100 index dipped 0.05%, Frankfurt’s DAX was down 0.83% while the Paris CAC 40 lost 0.91%.
In corporate news, France’s Sanofi-Aventis launched an US$18.5 billion hostile takeover offer for Genzyme Corp. Sanofi-Aventis’ previous offer was rejected by Genzyme’s board, so it is now taking the offer directly to shareholders.
The offer, at US$69 per share, is unchanged from Sanofi-Aventis’ original offer in July.
Automaker Opel says it will close its Antwerp plant in Belgium by the end of the year. The General Motors unit said it and the local government couldn’t find investors to keep the plant going by an agreed deadline. The company said Monday that it would remain open to new proposals during the wind down period.