Resource stocks to provide lift to TSX

The Canadian dollar moved higher amid stronger commodity prices, up 0.52 of a cent to 98.28 cents US.

New York futures were sharply higher with the Dow Jones industrial futures ahead 104 points to 12,441, the Nasdaq futures gained 20.2 points to 2,367 while the S&P 500 futures rose 12 points to 1,287.6.

Alcoa shares were up almost three per cent in pre-market trading in New York after the aluminum giant reported Monday after the close that its quarterly revenue beat analyst expectations, rising six per cent to US$5.99 billion. Analysts surveyed by Thomson Reuters expected revenue of $5.7 billion.

However, Alcoa turned in a quarterly loss of $191 million as a sluggish global economy hurt aluminum demand across a broad range of businesses from automobile manufacturing to construction, its first dip in the red since 2009.

Alcoa’s performance reflects global economic trends because its products are used in a wide range of businesses such as aircraft, automobiles, commercial vehicles like semitrailers, construction and pipe for the oil and gas industry. About half of its sales are in the U.S. and an additional 27% are in Europe.

It plans to cut global smelting capacity 12% by closing a smelter in Alcoa, Tenn., and curtailing operations in Texas, Italy and Spain. The cuts won’t affect its Canadian operations.

Traders also took in news that China’s import growth decelerated sharply in December in a new sign the world’s second-largest economy is slowing, in part because the government has been dealing with high inflation, particularly for food.

The customs agency said December imports rose 11.8% over a year ago, down from November’s 22.1% gain. Exports rose 13.4%, down only marginally from the previous month’s rate.

The country’s politically sensitive global trade surplus widened to $16.5 billion.

China has been a major prop in helping the global economy recover since the financial crisis of late 2008, driving up prices for oil and metals and commodity stocks on the resource-heavy TSX.

Meanwhile, the European Central Bank said Tuesday that the amount of overnight deposits that the region’s banks held with it rose to C481.93 billion on Monday, breaking the record C463.56 billion set only a day before.

The high deposits mean banks are keeping spare cash in a safe place even though they earn low interest.

And on the day that international debt inspectors were returning to Athens, Greece successfully raised C1.625 billion in the sale of 26-week treasury bills, at a marginally lower interest rate than a similar auction last month.

Debt-crippled Greece relies on international rescue loans to keep solvent.

Commodity prices advanced with the February crude contract on the New York Mercantile Exchange gained $1.89 to US$103.20 a barrel.

Copper prices were also higher as the March contract climbed eight cents to US$3.49 a pound.

And February gold rose $30.20 to US$1,638.30 an ounce.

European bourses racked up solid gains as London’s FTSE 100 index gained 1.21%, Frankfurt’s DAX rose 1.87% and the Paris CAC 40 climbed 2.73%.

Earlier in Asia, Japan’s Nikkei 225 index, reopening after a three-day holiday weekend, added 0.4%. Hong Kong’s Hang Seng index rose 0.7% while South Korea’s Kospi jumped 1.5%. Australia’s S&P ASX 200 rose 1.1%.

In Canadian earnings news, quarterly profits at Corus Entertainment Inc. came in at C$91.2 million, or 61 cents per share, beating average analyst estimates of 59 cents per share, according to a survey by Thomson Reuters. The results marked an increase from $90.7 million, or 58 cents per share, a year earlier. Revenues rose seven per cent to $236.9 million from $222.2 million thanks to double-digit growth in ad sales from its female-centric TV channels.

Elsewhere, TransCanada Corp. (TSX:TRP) has stepped up its publicity campaign for the politically charged Keystone XL pipeline. It has released a detailed breakdown of where the $7-billion project would create 20,000 jobs in the United States, if approved.