TSX heads for slightly higher open amid lower commodities, debt concerns

The Canadian dollar was little changed on currency markets, off 0.04 of a cent to 100.12 cents US.

U.S. futures signalled a positive start to the week with the Dow Jones industrial futures up 39 points to 12,827, the Nasdaq futures gained 6.8 points to 2,700.2 and the S&P 500 futures were ahead 3.9 points to 1,368.9.

The yield on Spain’s 10-year government bonds jumped to 6.1% on the secondary market, according to financial data provider FactSet. It had closed at 5.93% Friday after a week of persistent market tension.

The 10-year bond yield surged toward seven per cent late last year, a rate considered unsustainable for a country over a long period.

The country is caught between the needs to lower debt by cutting spending and to boost growth by investing more.

Spain is expected to enter its second recession in three years this quarter, with the country’s central bank forecasting its economy will contract 1.7% this year.

Commodity prices continued to lose ground over demand concerns with the May crude contract on the New York Mercantile Exchange down 41 cents to US$102.42 a barrel.

Copper prices drifted a penny lower to US$3.62 a pound. Copper has lost about eight per cent so far this month amid data showing slowing growth in China, which is the world’s biggest consumer of the metal. Copper is also known as an economic bellwether because it is used in so many industries.

And the June bullion contract in New York lost $12.10 to US$1,648.10 an ounce.

Traders looked ahead to an expected rise in retail sales in the U.S. during March as auto sales dipped but sales in chain stores remained solid. Economists looked for a 0.4% rise following a 1.1% gain in February.

Corporate earnings were also expected to set the trading tone this week. However, expectations for earnings have been ratcheted much lower after three years of solid double-digit increases.

There was little to cheer about from Monday’s reports.

Mattel shares fell six per cent in pre-market trading as first-quarter profit dropped 53% to US$7.8 million or two cents a share. Adjusted earnings were six cents per share. That was a penny below what analysts surveyed by FactSet were expecting.

Citigroup shares were off 0.66% after handing in earnings of 95 cents a share, six cents less than expectations.

In other corporate news, energy company Nexen Inc. (TSX:NXY) has received regulatory approvals clearing the way for an expansion at its oilsands operation in northern Alberta. The latest approvals are for two more extraction pads at the Long Lake operation, which has experienced numerous delays due to technical issues.

CAE Inc.’s military division won more than $950 million worth orders in its 2012 financial year including nearly half in its latest quarter, putting the training simulator company on track to beat last year’s sales. Among the orders was $170 million of training and services contracts from Brunei, announced Monday.

The TSX lost ground for a sixth, straight week last week, losing 0.5%, leaving the main index up about 100 points or 0.7% for the year to date on worries about a slowing global economy, falling corporate profits and rising risk from the European debt crisis. New York markets fell for a second week. Toro

European bourses were mixed with London’s FTSE 100 index down 0.5%, Frankfurt’s DAX gained 0.49% and the Paris CAC 40 was ahead 0.67%.

Asian markets closed mostly lower, however, as traders focused on data released Friday showing China’s economy slowed to a 8.1% growth rate in the January-March quarter, the slowest in almost three years. In the fourth quarter, growth was 8.9%.

Japan’s Nikkei slid 1.4%, South Korea’s Kospi was down 0.9% after the Bank of Korea lowered its 2012 economic growth outlook to 3.5%, from a December estimate of 3.7%.

Hong Kong’s Hang Seng fell 0.7% and Australia’s S&P/ASX 200 lost 0.4%.