TSX heads for higher open on solid Chinese growth data, RIM upgrade

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TORONTO - The Toronto stock market was set for a higher open Friday amid further indications that China continues to recover from a recent economic slump and an analyst upgrade for BlackBerry maker Research In Motion Ltd.

The Canadian dollar was down 0.45 of a cent to 101 cents US.

U.S. futures were mainly positive amid a solid earnings report from General Electric. The Dow Jones industrial futures rose 10 points to 13,552, the Nasdaq futures lost 6.5 points to 2,734 and the S&P 500 futures edged up 0.75 of a point to 1,476.5.

Research In Motion Ltd. (TSX:RIM) shares were up six per cent in pre-market trading in New York after Jefferies & Co. upgraded the stock to buy from hold and raised its price target to US$19.50 from $13. The move came on expectations RIM will enable Blackberry messaging on iPhones and Android devices.

RIM stock has already surged more than 25 per cent over the past week on rising optimism ahead of the unveiling of its new BB10 product next Wednesday.

Traders were relieved at data showing that growth in China rose to 7.9 per cent in the three months ending in December, up from the previous quarter’s 7.4 per cent.

For the year, the world’s second-largest economy grew by 7.8 per cent, which was China’s weakest annual performance since the 1990s.

The slowdown was due largely to government controls imposed to cool a real estate boom and surging inflation fuelled by Beijing’s massive stimulus in response to the 2008 crisis. But it worsened as demand for Chinese exports dropped unexpectedly, raising the risk of job losses and unrest.

However, analysts say China could suffer a setback if exports weaken or the government fails to maintain investment spending that is propping up a recovery.

Copper prices rose in the wake of the Chinese data. China is the world's biggest consumer of the metal which is viewed as an economic barometer as it is used in so many applications.

The March contract on the New York Mercantile Exchange was up two cents to US$3.68 a pound.

Oil prices were slightly lower after jumping about $2 over the past two sessions after inventory data showed a sharp decrease in stocks last week. Prices also found support this week after Islamic militants seized an Algerian natural gas facility.

The February crude contract on the Nymex declined 16 cents to US$95.33 a barrel.

February bullion was off a dime to US$1,690.70 an ounce.

On the earnings front, General Electric Co. reported net income of $4 billion on revenue of $39.3 billion for the quarter. The company’s operating profit per share was 44 cents, a penny higher than analysts expected. GE’s revenue also beat analysts’ expectations of $38.8 billion and its shares jumped 3.76 per cent in pre-market trading.

Shares in investment bank Morgan Stanley jumped seven per cent in pre-market trading as it said it earned US$867 million or 28 cents a share in the last quarter after stripping out an accounting charge. That beat expectations by a penny. Morgan Stanley revenue jumped 37 per cent to $7.5 billion, beating expectations of $7.2 billion.

After the close Thursday, chip giant Intel Corp. posted quarterly net income of $2.47 billion, or 48 cents per share, beating expectations by three cents. Revenue fell three per cent to $13.5 billion, matching analyst expectations. On a call with analysts, Intel chief financial officer Stacy Smith admitted that tablets are affecting sales of PC chips, which fell three per cent in the quarter. Intel shares lost five per cent in pre-market trading.

European bourses were mixed with London's FTSE 100 up 0.43 per cent, Frankfurt's DAX lost 0.16 per cent and the Paris CAC 40 rose 0.1 per cent.

Earlier in Asia, Japan’s Nikkei 225 soared 2.9 per cent to the highest finish in nearly three years.

Hong Kong’s Hang Seng rose 1.1 per cent, South Korea’s Kospi added 0.7 per cent and Australia’s S&P/ASX 200 rose 0.3 per cent.

In mainland China, the Shanghai Composite Index rose 1.4 per cent while the smaller Shenzhen Composite Index gained 1.5 per cent.

Organizations: Research In Motion Ltd., General Electric, Dow Jones Jefferies Co. Intel Corp. Morgan Stanley New York Mercantile Exchange Nymex Australias SP/ASX 200 Shanghai Shenzhen

Geographic location: China, TORONTO, U.S. New York London Frankfurt Asia

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