Source: The Canadian Press

The Toronto stock market headed for a positive session Wednesday as Germany’s chancellor sought to reassure markets that her country will do whatever is necessary to stabilize the euro.

However, it wasn’t clear if Angela Merkel was saying Berlin would be prepared to increase the current eurozone rescue package.

The Canadian dollar was higher against the greenback, up 0.28 of a cent to 101.32 cents US.

U.S. futures also headed higher as investors look to the release of the Federal Reserve’s survey of regional economic conditions later in the day.

The Dow Jones futures gained 59 points to 11,675, the Nasdaq futures were ahead 13 points to 2,299 while the S&P 500 futures advanced 6.7 points to 1,277.

Merkel’s comment came amid a relatively successful Portuguese bond auction which eased market worries that the country would soon need a financial bailout, though experts warned it is still not clear of danger.

Analysts said the success of the auction has a lot to do with a more active role taken by the European Central Bank in recent days.

The ECB has reportedly been buying Portuguese bonds in the markets in an attempt to get the yield down from unsustainably high levels of over 7% which were reached earlier this week.

Commodity prices were mixed with oil prices stabilizing after two days of sharp increases on news a 1,300-kilometre trans-Alaska pipeline — which normally carries about 620,000 barrels a day –remained shut after a leak was discovered Saturday at a North Slope pump station. Oil production on the North Slope was cut by 95%.

The February crude contract on the New York Mercantile Exchange added six cents to US$91.17 a barrel.

The slight rise came amid a report which showed U.S. gasoline supplies rose more than expected last week, suggesting demand may have slowed.

The American Petroleum Institute said late Tuesday that gasoline inventories rose by seven million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had forecast an increase of 2.9 million barrels. Inventories of crude rose 57,000 barrels.

The March copper contract on the Nymex was up four cents to US$4.39 a pound.

Bullion prices slipped with the February contract in New York down $4.90 to US$1,379.40 an ounce.

Investors also took in major acquisition activity in the mining sector.

Consolidated Thompson Iron Mines Ltd. (TSX:CLM) is being taken over by U.S. miner Cliffs Natural Resources Inc. (NYSE:CLF) for $4.9 billion. The American iron and coal producer said Tuesday that the deal will give it greater access to Asian markets.

Cliffs is offering $17.25 per share in cash, which is a 30% premium to Consolidated Thompson’s share price of $13.38 Tuesday on the Toronto Stock Exchange.

Earlier in Asia, Japan’s Nikkei 225 stock average closed flat, while Hong Kong’s Hang Seng index rose 1.5% and Australia’s S&P/ASX 200 advanced 0.3%.

South Korea’s benchmark Kospi closed at a record high for the second straight day, gaining 0.3% to 2,094.95.

London’s FTSE 100 index was up 0.4%, Frankfurt’s DAX rose 1.3% while the Paris CAC 40 gained 1.5%.

In corporate news, Lululemon Athletica Inc. (TSX:LLL) has raised its fourth-quarter earnings guidance due to stronger than expected sales. The yoga clothing retailer expects diluted earnings per share of 55 to 57 cents for the three months ended Jan. 30, up from earlier guidance 46 to 48 cents. Lululemon now expects net revenue to be in the range of $237 million to $239 million for the quarter, up from earlier guidance for between $210 million and $215 million.

Magna International Inc. (TSX:MG) expects total sales for 2011 will come in between US$25.6 billion and US$27.1 billion, the Canadian autoparts giant announced Wednesday. Magna bases that projection on estimates that 12.9 million vehicles will be built in North America this year and 13.3 million units will be built in Western Europe.

Canadian Pacific Railway Ltd. (TSX:CP) plans to spend up to $1.05 billion on capital projects this year, including $680 million to renew its basic track infrastructure and $200 million to increase volume and productivity.

CBC News reported that the federal government will give the long-delayed Mackenzie Valley natural gas pipeline the green light next week. It said that the controversial $16-billion pipeline would likely get approval at the next federal cabinet meeting but with one major caveat — no federal subsidies.