TSX heads for lower open following last week’s strong advance

Over the weekend, finance ministers from the Group of 20 leading industrial and developing nations reiterated their belief that Europe, in particular Germany and France, are thrashing out a comprehensive plan to stabilize the debt crisis.

“Risk appetite is being supported by weekend reports that Germany and France are spearheading a ‘shock and awe’ programme which is expected to be completely finalized at the EU Summit concluding Oct. 23 and then presented the following week at the G20 Summit (Nov. 3),” said Sue Trinh, a senior currency strategist of RBC Capital Markets.

Markets have been intensely volatile for weeks because the crisis threatens to inflict severe damage on the financial sector and send the global economy back into recession.

Traders also took in major announcements from the resource and financial sectors.

Mining giant Rio Tinto said Monday it will sell 13 of its aluminum assets worth about $8 billion, including refineries, smelters, power stations and a mine, as the world’s second biggest miner seeks to focus on its more profitable Canadian operations.

Rio Tinto bought the Canadian aluminum company Alcan Inc. for $38 billion in 2007.

And Sun Life Financial (TSX:SLF) will be in focus after the insurer said it will book a loss of $621 million in the third quarter due to “substantial declines” in both equity markets and interest rates. Canada’s third-largest insurer observed that equity markets were exceptionally volatile with North American markets dropping 12 to 14% in the three months ended Sept. 30.

U.S. futures were little changed following a solid gain last week with the Dow Jones industrial futures down 28 points to 11,538, the Nasdaq futures slipped 5.5 points to 2,361.8 and the S&P 500 futures were off 1.2 points to 1,218.

The TSX surged 4.25% while the Dow Jones industrials jumped just shy of five per cent last week but investors are still wary about European commitments to deal with the debt crisis.

As well as being lifted by hopes of a big eurozone plan, markets have advanced because of mounting evidence that the U.S. economy may be getting over its summer soft patch that had raised fears that the world’s largest economy may be heading back into recession.

Last week ended with the release of data showing better than expected U.S. retail sales during September and strong Canadian manufacturing sales during August.

Commodity prices were positive as the November crude contract on the New York Mercantile Exchange gained 12 cents to US$86.92 a barrel.

The December copper contract on the Nymex rose two cents to US$3.42 a pound while the December gold contract in New York was ahead $3.10 to US$1,686.10 an ounce.

Earlier in Asia, stocks advanced mainly on the European debt hopes.

Japan’s Nikkei 225 stock average finished up 1.5%, Hong Kong’s Hang Seng jumped two per cent while South Korea’s Kospi rose 1.6% and Australia’s S&P/ASX 200 climbed 1.7%.

European bourses were mixed with London’s FTSE 100 index ahead 0.28%, Frankfurt’s DAX declined 0.37% while the Paris CAC 40 index was up 0.01%.

In other corporate news, Research In Motion (TSX:RIM) said Monday it will offer its Blackberry subscribers a selection of premium apps for free to show appreciation for customers’ patience during the recent worldwide service disruptions. RIM said the apps will be worth a total of $100 for each customer.

Oil services company Halliburton reported a 26% jump in third-quarter net income to US$683 million as drilling projects in North American continue to boost revenue. Income from continuing operations was 94 cents per share, three cents better than expected. Revenue grew 40.4% to $6.55 billion in the period.