TH: Markets to open flat as earnings reports filed
THE CANADIAN PRESS
North American markets appear headed for a flat open on Thursday as investors refrain from making big bets ahead of a slew of earnings reports, as well as U.S. data on retail sales and the labour market.
The market is finding some support from big gains in overseas indexes that were driven by solid corporate earnings, but investors are anxious ahead of sales reports from U.S. retailers and the government's weekly tally of job losses – reports that will give them more insight into the financial health of the American consumer.
Retailers are expected to show that consumers continued to cut back on their spending in July. Overall, sales are expected to be down 5.5 per cent, worse than the 5. 1 per cent decline in June, according to a tally by The International Council of Shopping Centres-Goldman Sachs.
Meanwhile, the U.S. Labour Department is expected to report that the number of newly laid-off workers seeking unemployment benefits fell slightly last week, after rising more than expected in the previous week.
In Canada, investors will be digesting earnings reports from corporate heavyweights such as telecommunications giant BCE Inc. (TSX: BCE), oil and gas company Canadian Natural Resources Ltd. (TSX: CNQ) and major insurance firm Sun Life Financial Inc. (TSX: SLF).
Markets in Toronto and New York were relatively flat in Wednesday's trading, stalling a massive rally that propelled North American indexes sharply higher throughout July.
The S&P/TSX composite index inched up 28.83 points Wednesday to end the day at 11,046.93, a day after a 230-point surge saw it climb to close above 11,000 points for the first time in 10 months.
However, investors appear wary of taking the market too high too quickly and analysts were expecting stocks to drift after such a big move.
In New York, markets were lower after a trade group said its measure of the health of the U.S. services sector contracted more sharply than expected in July.
The Institute for Supply Management's services index clocked in at 46.4, down from 47 in June. It's the 10th straight month of decline, as any reading below 50 indicates the sector is shrinking. Analysts had expected a reading of 48.
The Nasdaq composite index slipped 18.26 points to 1,993.05 while the Dow Jones industrial average lost 39.22 points to 9,280.97.
Ahead of Thursday's market open, Dow futures were up seven points, or 0.1 per cent, at 9,252. Standard & Poor's 500 index futures were down less than a point at 1,000.10, while Nasdaq 100 index futures were down five points, or 0.3 per cent, at 1,609.50.
The Canadian dollar opened at 93.24 cents US, down 0.21 of a cent from Wednesday's close.
Overseas, Japan's Nikkei stock average rose 1.3 per cent and Hong Kong's Hang Seng index jumped 2.0 per cent. In late morning trading, Britain's FTSE 100 was up 0.6 per cent, Germany's DAX index was up 0.4 per cent, and France's CAC-40 was up 0.7 per cent.
Light, sweet crude fell 32 cents to $71.65 a barrel in electronic trading on the New York Mercantile Exchange.
