Source: The Canadian Press

The Toronto stock market headed for a lower open Thursday as prices for oil and metals fell back and investors took in a mixed bag of corporate earnings.

The Canadian dollar was lower as traders bought into the U.S. currency after Portugal’s borrowing costs spiked to a new euro-era high. The loonie fell 0.36 of a cent to 100.23 cents US.

U.S. futures indicated a negative open after Cisco’s quarterly earnings report disappointed and investors wonder if markets are set for a pause after a strong start to 2011 trading.

The Dow Jones industrial futures fell 54 points to 12,153, the Nasdaq futures lost 17.5 points to 2,345 while the S&P 500 futures were down 6.6 points to 1,313.

“The big run up that we’ve seen of late could now be poised to turn into a phase of consolidation,” said Chris Weston, institutional trader at IG Markets.

Strong economic data and quarterly earnings along with surging oil and copper prices have pushed the TSX up 3.2% so far this year while the Dow industrial average has jumped 5.7% in the first six weeks of trading this year.

But analysts have pointed out that they wouldn’t be surprised to see a small pullback, particularly since North American indexes have charged ahead since last August with hardly a break.

Investors did grapple with one major earnings disappointment Thursday morning.

Networking gear maker Cisco said Wednesday it expected earnings, excluding items, of 35 cents to 38 cents per share in the current quarter, which ends in April. Analysts were expecting 40 cents per share.

The company warned late last year that sales to government customers were dropping off, and Cisco CEO John Chambers on Wednesday told analysts that the trend was continuing. Many U.S. states are struggling with big budget shortfalls. Cisco shares tumbled 10.6% in pre-market trading in New York.

The U.S. dollar strengthened amid uncertainty over Portugal’s financial future as its borrowing rates hit new euro-era records, signalling the government and fellow European leaders have been unable to check the spread of the debt crisis.

The 10-year interest rate on Portuguese bonds hit 7.6% on the secondary market Thursday — not far off the level that forced Ireland to agree to a bailout — before falling back to 7.3% amid unconfirmed reports the European Central Bank was buying the bonds to halt the rise.

The higher U.S. dollar helped depress crude prices with the March contract on the New York Mercantile Exchange down 22 cents to US$86.49 a barrel.

Metal prices also fell with the March copper contract in New York down two cents to US$4.50 and the April bullion contract in New York lost $8.10 to US$1,357.40 an ounce.

Earlier in Asia, Japan’s Nikkei 225 stock average slipped 0.1% while Hong Kong’s Hang Seng index slid two per cent.

Bucking the trend was China, where investors snapped up bargains in banks and property shares following a selloff that was sparked by China’s interest rate hike. The benchmark Shanghai Composite shot up 1.6% and the Shenzhen Composite Index for China’s smaller market surged 2.9%.

London’s FTSE 100 index lost 0.88%, Frankfurt’s DAX was down 0.44% and the Paris CAC 40 declined 0.81%.

In other earnings news, BCE Inc.’s profit is up sharply, with the telecom and media company’s net income in the fourth quarter rising by 25.4% to $439 million or 60 cents a share, missing analysts estimates by one cent.

Operating revenues rose slightly to $4.68 billion from $4.65 billion, with most of that generated by BCE’s main subsidiary Bell Canada.

Thomson Reuters Inc. (TSX:TRI) is raising its quarterly dividend to 31 cents US per share or US$1.24 per share annually. The announcement came as the information services company reported US3.46 billion of revenue in the fourth quarter, up three per cent from the comparable period of 2009. Profit equalled 27 cents of diluted earnings per share, or 43 cents per share on an adjusted basis.

Air Canada (TSX:AC.A) reported that fourth-quarter profits rose to $134 million, as it booked foreign exchange gains of $111 million. The results compared to a net loss of $56 million a year ago. For the full fiscal year, Air Canada reported a net profit of $107 million, compared to a loss of $24 million in 2009.

In other corporate news, Encana Corp. (TSX:ECA) and PetroChina have reached a deal to work together on a shale natural gas play around the Alberta-British Columbia boundary. The state-owned Chinese firm will invest $5.4-billion for a 50% stake in Encana’s Cutbank Ridge assets.