Toronto stocks seen opening lower on soft energy

Tue Jul 22, 2008 9:04am EDT
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TORONTO, July 22 (Reuters) - Toronto's main stock market index was seen opening lower on Tuesday as soft energy prices and weak results from the country's top railway companies weigh on the market.

Also affecting investor psyche are weak results from a string of U.S. bellwether issues including Apple Inc (AAPL.O: Quote) and Wachovia Corp WB.N.

"It's going to be a very sloppy market," said John Ing, president at Maison Placements Canada. "The opening is Wachovia's loss and that will weigh on the markets."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE begins the day at 13,689.19 after jumping about 1 percent in the previous session on a takeover bid for TransAlta Corp (TA.TO: Quote) and rising commodity prices.

Industrial shares are expected to take a hit as both Canadian National Railway (CNR.TO: Quote) and Canadian Pacific Railway (CP.TO: Quote) reported lower second-quarter results.

Canadian Pacific reported a nearly 40 percent drop in earnings in the second quarter on Tuesday, due to a slowing U.S. economy and rising fuel costs.

On Monday, Canadian National posted an 11 percent drop in second-quarter earnings, saying the stronger Canadian dollar and higher fuel costs crimped its bottom line.

Wachovia will also ratchet up the fears in the financial sector after the fourth-largest U.S. bank posted an $8.86 billion second-quarter loss, slashed its dividend and announced 6,350 job cuts after losses tied to mortgages soared.

Wachovia's losses will surely be a disappointment to investors who were just starting to breathe easy following stronger-than-expected results recently from other U.S. financial institutions.   Continued...