The Canadian Press

U.S. futures indicated a weak open after a late day downgrade in the banking sector led to a sharp loss on Wednesday amid a mixed slew of earnings reports.

The Dow Jones industrial futures added three points to 9,904, the Nasdaq futures lost 4.5 points to 1,748.8 while the S&P futures dipped 1.7 points to 1,076.4.

The Canadian dollar rose for a second day, up 0.52 to US96.12¢.

Oil prices backed away from Wednesday’s close above US$81 a barrel, the highest level in a year, with the December bullion contract on the New York Mercantile Exchange down 71¢ to US$80.66 a barrel. Prices surged more than US$2 Wednesday after U.S. data showed another large drawdown of gasoline inventories last week.

Investors also took in major acquisition activity in the oilpatch. Canadian oil and gas producer Harvest Energy Trust (TSX:HTE.UN) has agreed to a proposed takeover by state-owned Korea National Oil Corp. in a deal valued at $4.1 billion.

Calgary-based Harvest Energy said late Wednesday that the deal with the South Korean national oil company values its units at $10 per share, for a total cash consideration of about $1.8 billion.

News that China’s economy expanded at a brisk 8.9% in the third quarter gave investors few reasons to wade deeper into the markets.

While the figures were seen as mostly encouraging, some analysts said Chinese exports and private investment were still lagging, suggesting growth was largely the result of enormous government stimulus spending.

The Toronto market is likely to be pressured by heavyweight Potash Corp. of Saskatchewan Inc. (TSX:POT), which said continuing caution among buyers around the world pushed down third-quarter profits by nearly 80%. Net income was US$248.8 million or 82¢ per share, a drop from $1.2 billion or $3.93 per share in the same period last year.

Sales fell to US$1 billion compared with US$3.1 billion in the same period last year. Its shares were down about 2% in pre-market trading in New York.

Investors were also disappointed with online marketplace operator EBay, which reported Wednesday after the close that its third-quarter net income fell 29% to US$350 million or 27¢ a share as operating expenses climbed.

Revenue rose, though, due mainly to growth in its PayPal online payments business.

But revenue in EBay’s main marketplaces business dipped 1% year over year.

Cigarette maker Philip Morris International Inc., printer and copier supply company Xerox Corp. and Dow Chemical Co. all reported weakening sales, but were able to beat profit expectations.

However, the mixed earnings signals continue to show an economy in flux, and could give traders reason to pause in their relentless run-up in stocks that began in March.

Credit card lenders American Express Co. and Capital One Financial Corp. should provide clues into whether consumers are still struggling to repay loans, which has been a major problem for nearly the entire financial sector for the past two years. Both report after the market closes.

Metal prices were soft as the December gold contract on the Nymex faded US$5.80 to US$1,058.70 an ounce while December copper dipped 2¢ to US$3.02 a pound after charging ahead more than 10¢ on Wednesday.

In overseas trading, Asian stocks dropped as investors were spooked by U.S. markets falling late Wednesday after a leading analyst downgraded major U.S. bank Wells Fargo & Co, touching off more fears about the financial sector.

Japan’s Nikkei 225 stock average fell 0.6% and Hong Kong’s Hang Seng dropped 1.1%.

In China, the Shanghai index lost 0.5%.

London’s FTSE 100 index lost 1.03%, Frankfurt’s DAX dropped 1.35% while the Paris CAC 40 was down 1.44%.