Source: The Canadian Press

The Toronto stock market is poised to open higher Tuesday following a holiday Monday that saw a huge gain on Wall Street.

All the major U.S. stock indexes rose about 2% Monday when the Toronto Stock Exchange was closed for a provincial holiday.

This followed data that showed better-than-expected U.S. and European manufacturing activity in July, strong earnings reports from European banks and news that China isn’t likely to take steps to slow its economy.

Stronger commodity prices are also set to give the TSX a boost.

The price of oil added 39 cents to US$81.73 a barrel following a gain of $2.39 Monday.

Gold climbed by $1.60 to US$1,187 an ounce, while the Canadian dollar added 0.43 of a cent to 97.68 cents US.

Monday’s news was encouraging after months of reports showing the recovery was weakening contributed to sharp swings in stock prices. Strong earnings in July helped drive stocks to their best month in a year, but the rally was fading at the end of the month on new worries about the economy.

August in general is seen as a volatile month for stocks, largely because many traders are away on vacation. That makes for low trading volumes and exaggerated price moves.

In New York, stock futures dipped Tuesday after a batch of mostly disappointing earnings and news that the pace of consumer spending stalled in June took some excitement away from Monday’s big gains.

The Commerce Department said personal spending was unchanged in June, the third straight month of lacklustre consumer demand. Incomes were flat as well, the weakest showing in nine months. Economists had expected spending to rise 0.1% and income to rise 0.2%.

Consumer spending accounts for a large portion of U.S. economic activity, so growth in personal spending is considered vital to a strong recovery.

Consumer products giant Procter & Gamble Co. and chemical maker Dow Chemical Co. both reported profit and revenue that fell short of forecasts. Those disappointments more than offset better-than-expected results from pharmaceutical company Pfizer Inc.

Investors particularly want to see revenue beat expectations because that eases concerns that the economy is slowing down and companies need revenue growth to continue driving earnings higher.

Ahead of the opening bell, Dow Jones industrial average futures fell 0.2%. Standard & Poor’s 500 index futures fell 0.2%, while Nasdaq 100 index futures fell less than 0.1%.

Canadian investors will be keeping an eye on gold stocks after Kinross Gold Corp. (TSX:K) said it plans to acquire all the outstanding common shares of Red Back Mining Inc. (TSX:RBI) that it doesn’t already own in an all-stock deal valued at US$7.1 billion. The transaction is expected to increase Kinross’s gold production to approximately 3.9 million ounces by 2015.