Wall Street futures are pointing to a flat opening this morning. In Canada, investors are digesting a poor retails sales report mixed with good news from TD Bank.

TD is reporting a 74% improvement in quarterly profit — $603 million — as its return on equity rose to 20% from 11%. The bank also announced a 2¢ per share increase in the quarterly dividend to 34¢ per share.

Statistics Canada is reporting lower demand for motor vehicles in December, coupled with poor sales in general merchandise and clothing stores, pulled total retail sales to their lowest level in a year.

Retail sales dropped 1.2% in December to $26 billion, after falling 0.2% in November. Consumer spending in retail stores fell in all provinces in December. Declining sales by auto dealers have weakened total retail sales since last August. Previously, retail sales had generally been increasing since the fall of 2001.

Excluding sales by motor and recreational vehicle dealers, retail sales remained essentially flat in December (-0.1%), after rising 0.7% in November. Total retail sales, minus sales by motor and recreational vehicle dealers, advanced 4.4% in 2003, compared with a 5.4% gain in 2002.

In a separate report, StatsCan says that Canada’s current account surplus with the rest of the world declined $1.2 billion in the fourth quarter to $6.7 billion on a seasonally adjusted basis. This decline resulted from a lower surplus on trade in goods and a higher deficit on investment income. The current account surplus for all of 2003 was $25.8 billion, the fourth consecutive year that exceeds $20 billion.

The capital and financial account showed funds flowing out of Canada to the rest of the world for a third straight quarter. Canada’s direct investment abroad was the strongest in 10 quarters, while foreign portfolio investors injected funds into both Canadian stocks and bonds.

The economic news coming out of the U.S. isn’t any better this morning. Durable-goods orders tumbled in January amid the largest drop in transportation-equipment demand since 2002. Demand for longer-lasting manufactured goods decreased 1.8% to $180.98 billion last month, says the U.S. Commerce Department. But December orders were revised sharply up to a 1.6% increase from the previously reported 0.3% gain. Economists had expected a more modest 1.4% rise in January.

The U.S. Labour Department is also reporting bad news. Initial jobless claims climbed by 6,000 last week to a seasonally adjusted 350,000, the Labor Department reported Thursday. That followed a drop of 24,000 claim in the prior week. Economists had expected claims to drop by 4,000.

In Europe at midday, markets are showing small gains. London’s FTSE 100 index is up 0.3%. The main indexes in Frankfurt is up 0.3% and 0.5% in Paris.

Asian stock markets closed higher. Tokyo’s Nikkei rose 156.56 points or 1.5% at 10,815.29. Hong Kong’s Hang Seng index rose 75.17 points, or 0.6%, to 13,674.64.

On Wednesday, the Toronto Stock Exchange S&P/TSX composite index closed up 32.33 points, or 0.38%, at 8,637.32. U.S. markets also finished higher as upbeat earnings brought investors back into the markets. The Dow Jones industrial average rose 35.25 points to 10,601.62, while the Nasdaq composite index moved 17.54 points higher to 2,022.98.