Canadian stocks are poised for a strong open Wednesday as risk appetite improved after Germany's Federal Constitutional Court today allowed the ratification of the European Stability Mechanism. Also, speculation of imminent monetary stimulus measures from the Federal Reserve likely to help lift trader sentiment.
U.S. stock futures were pointing to a higher open.
On Tuesday, the S&P/TSX Composite Index edged up 5.02 points or 0.04 percent to 12,220.45.
The price of crude oil was extending gains Wednesday morning as traders await cues from the official inventories data from the EIA. Today during trading hours, the EIA will release its crude oil inventories report for the weekended September 07. Analysts expect crude oil inventories to shed by 2.90 million barrels and gasoline stock to 1.70 million barrels last week. Crude for October edged up $0.06 to $97.23 a barrel.
The price of gold was moving higher as the U.S. dollar was trading lower versus a basket of currencies amid hopes for additional monetary stimulus measures from the Federal Reserve. The ESM ruling helped euro advance, putting further pressure on the dollar. Gold for December gained $5.70 to $1740.60 an ounce.
In corporate news from Canada, Dollarama Inc. (DOL.TO) reported a much improved second quarter net income of $49.8 million or $0.66 per share, compared to $37.6 million or $0.50 per share recorded a year ago.
Wireless communication equipment company International Datacasting Corp.(IDC.TO) slipped into the red in second quarter, reporting net loss of C$305,000 or C$0.01 per share compared to net earnings of C$88,000 or C$0.00 per share in the year ago quarter.
Funeral services provider Arbor Memorial Services Inc. (ABO_A.TO, ABO_B.TO) announced that it would be acquired by shareholders group for $32.00 per share in cash, representing over 45 percent premium to its latest closing price.
Mining company Stornoway Diamond Corp. (SWY.TO) announced the appointment of Ebe Scherkus as Chairman of the Board.
In economic news from the U.S., the Labor Department said import prices rose by 0.7 percent in August following a revised 0.7 percent drop in July. Economists had expected import prices to surge up by 1.5 percent compared to the 0.6 percent decrease originally reported for the previous month. On the other hand, U.S. export prices increased by more than expected during the month amid another notable increase in prices for agricultural exports.
From the euro zone, Germany's inflation, measured by the harmonized index of consumer prices (HICP), rose to 2.2 percent in August from 1.9 percent in July, final data released by the Federal Statistical Office confirmed. At the same time, the consumer price index (CPI) climbed 2.1 percent year-on-year in August, up from July's 1.7 percent. This was slightly above the flash estimate of 2 percent.
Meanwhile, industrial production in the euro area increased in July, recovering from the previous month's decline, and the rate of growth exceeded economists' forecast, data released by statistical office Eurostat showed. Industrial production increased 0.6 percent on a monthly basis in July, reversing June's 0.6 percent decrease. Economists were looking for a 0.1percent gain.
Germany's Federal Constitutional Court on Wednesday allowed the ratification of the European Stability Mechanism (ESM), but with certain conditions. The court said Germany must cap its bailout fund share at EUR190 billion.
by RTT Staff Writer
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