TSX set for higher open amid rising commodities, disappointing Talisman earnings

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TORONTO - The Toronto stock market was set for a positive open Wednesday amid disappointing news from the oil sector and ahead of the latest reading on American retail sales.

The Canadian dollar was down 0.11 of a cent to 99.62 cents US.

U.S. futures were higher with the Dow Jones industrial futures ahead 18 points to 13,991, the Nasdaq futures were eight points higher to 2,768.8 and the S&P 500 futures gained three points to 1,519.25.

Talisman Energy Inc. (TSX:TLM) recorded US$367 million or 37 cents per share in quarterly net income, beating forecasts of 16 cents a share. But the gain was mainly due to disposal of some assets and the company continued to feel the effects of low natural gas prices. Talisman posted revenue of $1.6 billion, which was $300 million less than what was expected.

Thomson Reuters (TSX:TRI) posted US$497 million of adjusted earnings, or 60 cents per share in the latest quarter, compared with US$445 million or 54 cents per share in the fourth quarter of 2011. Net income attributable to common shareholders was US$372 million, compared with a year-earlier loss of US$2.6 billion. Thomson’s overall revenue, including discontinued operations, fell to $3.4 million from $3.6 billion, a five per cent decline. However, revenue from continuing operations was up two per cent from US$3.3 billion.

Traders are also taking in earnings during the day from Sun Life Financial (TSX:SLF) along with gold producers Kinross Gold (TSX:K) and Agnico-Eagle Mines (TSX:AEM).

In the U.S., farm and construction equipment maker Deere & Co. says its first-quarter net income leaped 22 per cent to $649.7 million or $1.65 per share. Revenue rose almost 10 per cent to $7.42 billion. Analysts surveyed by FactSet had been expecting earnings of $1.39 per share on revenue of $6.73 billion .as it sold more farm machines for higher prices.

Economists looked for January retail sales to increase by a slight 0.1 per cent following a 0.5 per cent rise in December. A commentary from BMO Capital Markets said sales were "held back by higher payroll taxes and witholding rates for upper income earners."

Commodity prices were mainly higher as the March crude contract on the New York Mercantile Exchange rose 31 cents to US$97.82 a barrel amid falling U.S. inventories. A report late Tuesday from the American Petroleum Institute showed a drop of 2.3 million barrels in U.S. crude stockpiles last week. If confirmed by data from the Energy Department’s Energy Information Administration to be released later Wednesday, it would be the first fall in crude supplies in over a month.

A survey of analysts by Platts, the energy information arm of McGraw-Hill Cos., was expecting crude stocks to have risen by 2.5 million barrels.

April bullion on the Nymex declined $2.40 to US$1,647.20 an ounce while March copper was up a penny to US$3.75 a pound.

Overseas, Japan’s benchmark Nikkei index tumbled one per cent as the yen strengthened against the dollar following a pledge by finance ministers from the world’s major advanced economies to refrain from intentionally weakening their currencies.

Finance ministers from the Group of Seven nations said in a statement following a meeting in Brussels that they remained committed to exchange rates driven by the market, not government or central bank policies.

Traders interpreted the statement as a message directed at Japan, where the yen has plummeted against the dollar since Prime Minister Shinzo Abe took office and pushed the central bank for ultra-loose monetary policy.

Australian stocks closed at their highest level since September 2008. The S&P/ASX 200 gained 0.9 per cent after the release of strong earnings from Commonwealth Bank of Australia and construction company Leighton Holdings.

South Korea’s Kospi advanced 1.6 per cent.

Markets in mainland China, Hong Kong, Taiwan and Vietnam were closed for Lunar New Year holidays.

European bourses were positive with London's FTSE 100 index edging up 0.02 per cent. Frankfurt's DAX gained 0.59 per cent while the Paris CAC 40 was up 0.26 per cent.

Organizations: TSX, Dow Jones, Sun Life Financial Talisman Energy Inc. Agnico-Eagle Mines Thomson Reuters Deere Co. FactSet BMO Capital Markets New York Mercantile Exchange American Petroleum Institute Energy Departments Energy Information Administration McGraw-Hill Nymex Nikkei Group of Seven SP/ASX 200 Commonwealth Bank of Australia Leighton Holdings FTSE 100

Geographic location: U.S., TORONTO, Japan Brussels China Hong Kong Taiwan Vietnam London Frankfurt

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