Source: The Canadian Press

The Toronto stock market headed for a higher open Tuesday amid as market heavyweight Potash Corporation of Saskatchewan Inc. (TSX:POT) rejected an unsolicited US$38.6 billion bid from Australian natural resources company BHP Billiton Ltd.

PotashCorp says the offer, worth US$130 per share in cash, is “grossly inadequate” and not in the best interests of its shareholders.

Potash shares jumped 30.5% to US$146.38 in pre-market trading in New York.

The Canadian dollar was ahead 0.65 of a cent to 96.38 cents US.

Meanwhile, U.S. futures pointed to a positive open following better than expected earnings from retail bellwethers Wal Mart Stores and Home Depot.

The Dow Jones industrial futures gained 45 points to 10,318, the Nasdaq futures gained 10.5 points to 1,830.5 while the S&P 500 futures rose 6.6 points to 1,083.7.

Modest sales increases helped boost Home Depot Inc.’s second-quarter net income 7% to US$1.19 billion or 72 cents a share, a penny better than analysts had expected. The largest U.S. home-improvement retailer also trimmed its revenue forecast but raised its earnings forecast to account for share repurchases.

And Wal-Mart Stores Inc. reported a 3.6% increase in second-quarter net income to US$3.59 billion or 97 cents a share, better than the 96 cents a share that analysts forecast.

The retailer also raised its earnings guidance for the full year as it benefits from cost-cutting and robust global growth in China, Brazil and Mexico.

The TSX should find lift from the resource sector after commodity prices rose.

Oil prices edged up for the first time in five days Tuesday with the September contract on the New York Mercantile Exchange ahead 68 cents to US$75.92 a barrel.

Oil has dropped from above $81 a barrel early last week amid resurgent fears that the world economy may not grow as much as expected in the second half.

Japan’s surprisingly low economic growth in the second quarter, coupled with a disappointing regional manufacturing report in the U.S. dampened market sentiment. Indicators from China, the world’s biggest energy consumer, also show growth is slowing as Beijing clamps down on a credit splurge.

Adding to those worries on Tuesday was an investor confidence survey in Germany which disappointed investors.

Germany’s ZEW institute’s monthly confidence index fell more than expected on worries that slowing global growth may hurt the country’s export-led recovery.

The September copper contract on the Nymex gained five cents to US$3.33 a pound while December gold in New York was ahead $3 to US$1,229.20 an ounce.

Meanwhile, investors were getting ready for a slew of economic data out of the U.S. later in the day, with July industrial production, housing starts, building permits and producer price inflation all set for release.

In overseas trading, China’s Shanghai Composite Index added 0.4% and Hong Kong’s Hang Seng rose 0.1% and the Tokyo Nikkei 225 stock average fell 0.4%.

London’s FTSE 100 index gained 0.78%, Frankfurt’s DAX was up 1.03% and the Paris CAC 40 advanced 0.7%.

In other corporate news, Magellan Aerospace Corporation (TSX:MAL) saw its net income increase from a year earlier in the second quarter, but had its overseas revenues dragged down by unfavourable exchange rates. The Toronto-based company, reported net income of $6.3 million or 13 cents per share in the second quarter, up 18% from a year ago.

Quarterly revenues went up 2.3% to $181.5 million.