TORONTO - The Toronto stock market looked set to open lower as traders await the start of the summer corporate earnings season to gauge the health of the North American economy, with U.S. aluminum giant Alcoa reporting earnings after markets close on Tuesday.
Alcoa is particularly anticipated because the company is viewed as an economic bellwether by virtue of the fact that its aluminum products are widely used, including in manufacturing and the auto industry, and could give an indication about the strength of the American economy. Many Canadian companies start to report their quarterly earnings later this month and into August.
The Canadian dollar gained 0.01 of a cent to 93.67 cents US.
U.S. futures were lower with the Dow Jones Industrial futures down 18 points to 17,024.21, the Nasdaq futures dropped two points to 3,910.71 and the S&P 500 futures lost 2.5 points to 1,977.65.
The price of oil slipped closer to $103 a barrel as concerns about possible supply disruptions continued to fade. Oil hit a 10-month closing high of $107.26 on June 20, reflecting worries that insurgents in Iraq might push into important oil-producing regions and choke off supplies from that country, the second-biggest exporter from OPEC (Organization of the Petroleum Exporting Countries).
In corporate earnings in Canada, Quebec-based pharmacy chain Jean Coutu (TSX:PJC.A) is reporting a lower first-quarter net profit of $54.1 million, or 29 cents per share, compared with $108.6 million, or 51 cents per share, for the same quarter a year ago. Jean Coutu says the decrease in net profit is attributable to a gain of $54.4 million related to its investment in U.S. pharmacy chain Rite Aid recognized during the first quarter of fiscal year 2014. Revenues increased to $688.6 million, compared with $681.6 million year-over-year.
Montreal's CAE says it has signed contracts worth about $120 million with a number of global airlines and Bombardier (TSX:BBD.B) for seven flight simulators, training equipment and other services. The airlines include Air France, Middle East Airlines, Indonesia'sLion Air and Turkish Airlines. CAE (TSX:CAE) said the contracts include a full-flight simulator reproducing Bombardier's Challenger 350 business jet, which will be delivered to Bombardier's training centre in Montreal in 2015.
In Europe, Italian Finance Minister Pier Carlo Padoan said the European Union and Italy in particular must focus on making structural reforms to boost growth, not try to ease the rules limiting government debt.
Italy just took over the rotating presidency of the 28-nation EU and will, according to Padoan, try "to help all countries to find incentives and pressure to reform" to reduce unemployment.
On the commodity markets, the August crude contract on the New York Mercantile Exchange down 10 cents to US$103.43 a barrel.
August bullion was up $7.10 to US$1,324 an ounce, while September copper was up a penny to US$3.26 a pound.