Stocks set to move lower amid mixed earnings;traders look to economic data

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TORONTO - The Toronto stock market headed for a lower open Tuesday with investors focused on earnings from Canadian Pacific Railway (TSX:CP) and automaker Ford (NYSE:F).

Traders also looked to a raft of economic data coming down this week that could provide the impetus for further gains on North American markets, which are set to close out January trading with solid gains.

The Canadian dollar found some equilibrium after a string of losses, rising 0.04 of a cent to 99.39 cents US.

The dollar had tumbled about 1.4 cents US since the Bank of Canada indicated last Wednesday that it will be slower to raise interest rates than had been expected because of economic weakness. Higher rates tend to attract investors and push up the currency.

U.S. futures were negative with the Dow industrial futures down 26 points to 13,806, the Nasdaq futures were eight points lower to 2,729.5 while the S&P 500 futures were down 4.75 points to 1,492.25.

Canadian Pacific Railway Ltd. (TSX:CP) says its profit was cut to $15 million or eight cents per share in the fourth quarter amid a number of restructuring expenses. On an adjusted basis, Canadian Pacific says it earned $1.28 per share, in line with analyst estimates and an improvement from $1.11 a year earlier.

Ford earned $1.6 billion in the fourth quarter or 31 cents per share, which beat analysts’ forecast of 25 cents per share. Fourth-quarter revenue rose five per cent to $36.5 billion, beating analysts’ forecast of $33.5 billion. But its shares fell about three per cent in pre-market trading because of a worse than expected outlook for sales in Europe, where many countries are in recession.

Pfizer Inc. shares were up slightly in the pre-market as fourth-quarter profit more than quadrupled to US$6.32 billion or 85 cents a share. Excluding one-time items, the Viagra maker would have had a profit of $3.51 billion, or 47 cents per share, three cents more than analysts were expecting. Revenue fell seven per cent to $15.1 billion, mainly due to generic competition to cholesterol blockbuster Lipitor. Analysts expected $14.35 billion.

After the close Monday, Yahoo said its fourth-quarter earnings dipped eight per cent to $272 million, or 23 cents per share. The earnings would have been higher than the previous year, if not for a charge to close its South Korea operations and other one-time accounting items. If not for those charges, Yahoo said it would have earned 32 cents per share, five cents better than estimates. Its shares were up 2.35 per cent in pre-market trading.

On the economic front, traders are looking for the latest Case-Shiller House Price Index and the Conference Board's reading on consumer confidence.

The U.S. Federal Reserve starts its two-day meeting on interest rates Tuesday. No one expects the central bank to move on rates but traders will look for clues as to when the Fed might end its latest round of economic stimulus.<

The key piece of data for the week comes out Friday. Economists generally expect the U.S. non-farm payrolls report to show that the economy created 153,000 jobs in January, slightly below December’s 155,000 reading.<

Traders will also take in the latest readings on economic growth in Canada and the U.S. during the week.

Commodity prices were mixed as the March crude contract on the New York Mercantile Exchange added three cents to US$96.47 a barrel.

March copper on the Nymex was off a penny to US$3.65 a pound while February gold gained $8.70 to US$1,661.60 an ounce.

European bourses were also mixed as London's FTSE 100 index rose 0.09 per cent, Frankfurt's DAX was down 0.24 per cent while the Paris CAC 40 declined 0.26 per cent.

Earlier in Asia, Japan’s Nikkei 225 index rose 0.4 per cent but Hong Kong’s Hang Seng slipped less than 0.1 per cent.

North American markets are ending January trading on a positive note thanks to a better than expected U.S. earnings season and relief that U.S. politicians managed to avoid pushing the economy over the so-called fiscal cliff and reached a temporary agreement on raising the debt ceiling.

The TSX is up just over three per cent for the month. The Dow industrials have charged ahead to a series of fresh five year highs and are up almost six per cent.

Organizations: Canadian Pacific Railway Ltd., TSX, North American Ford NYSE Bank of Canada Yahoo U.S. Federal Reserve Pfizer Inc. Lipitor Shiller House New York Mercantile Exchange Nymex FTSE 100

Geographic location: U.S., TORONTO, Europe South Korea Canada London Frankfurt Asia

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