TSX set to open lower as commodity prices sink

The Canadian dollar was down 0.11 of a cent to 100.23 cents US. The greenback rose against other currencies after Fitch ratings agency downgraded Greece further into junk status, from ‘CCC’ to ‘C’ following the announcement of the details of the country’s debt swap deal with private creditors.

The agency said Wednesday the downgrade indicated “that default is highly likely in the near term.” The bond swap deal with private creditors will see €107 billion of Greece’s debt held by banks and other private holders of government bonds written off.

U.S. futures were weak with the Dow Jones industrial futures down four points to 12,941 a day after the blue chip barometer cracked the 13,000-mark for the first time since May, 2008. The Nasdaq futures were off 0.5 of a point to 2,590.5 and the S&P 500 futures declined 1.2 points to 1,358.9.

The Toronto market ran up 165 points after eurozone countries signed off on a €130 billion bailout to head off a disorderly default by Greece and China announced moves to ease lending to encourage growth. New York markets were little changed as investors worried that the Greek bailout plan might not be enough to keep the country from eventually defaulting on its debts and possibly leaving the eurozone.

The April crude contract on the New York Mercantile Exchange was off 20 cents to US$1,758.30 a barrel. A stronger greenback usually helps depress oil prices, which are denominated in dollars, as it makes oil more expensive for holders of other currencies.

Metal prices were lower as April copper edged two cents lower to US$3.82 a pound after surging 13 cents on Tuesday.

Bullion was little changed, up a dime to US$1,758.60 an ounce.

On the earnings front, Sears Canada Inc. (TSX:SCC) said Wednesday it earned $38.7 million or 36 cents per share in its latest quarter, which includes the key Christmas retail period. That compared with net profits of $82.7 million or 77 cents per share a year earlier.

Total revenues for the quarter dropped 6.4% to $1.37 billion from $1.46 billion.

Rogers Communications Inc. (TSX:RCI.B) said it is increasing its quarterly dividend by 11% to 39.5 cents a share as its fourth quarter profits and revenues improved. Net income grew 8% to $327 million, or 61 cents per diluted share, from $302 million, or 50 cents per share. Operating revenue grew to $3.18 billion from $3.14 billion.

Meantime, rival telecom Telus Corp. said Tuesday it would raise its dividend to 61 cents a share, up from 58 cents. Telus also said it wants to end its dual-class share structure by converting its non-voting shares into voting shares on a one-for-one basis.

The dual-class share structure at Telus was designed more than a decade ago to deal with federal rules that limited foreign ownership. However, U.S. telecommunications firm Verizon sold its 20.5% equity stake in Telus in 2004.

European bourses were in the red with London’s FTSE 100 index down 0.32%, Frankfurt’s DAX declined 0.71% and the Paris CAC 40 was off 0.39%.

Earlier in Asia, stocks were generally buoyant despite another fairly weak Chinese manufacturing survey.

The preliminary reading of HSBC’s China manufacturing index rose from 48.8 in January to 49.7 in February. But the number was still below the 50-level that signifies expansion, raising hopes that China could embark on more stimulus measures to encourage growth.

The news helped spur mainland Chinese shares higher. The Shanghai Composite Index rose 0.9% and the smaller Shenzhen Composite Index gained 2.2%.

The Nikkei 225 index in Tokyo added 1% to close at its highest finish in more than six months, as a weakening yen boosted the prospects of Japan’s critical export sector. Meanwhile, Hong Kong’s Hang Seng rose 0.3%.