January 21, 2011 / 1:47 PM / in 7 years

CANADA STOCKS-TSX may open higher; buoyed by strong U.S. results

Jan 21 (Reuters) - Canadian stocks looked set to open higher on Friday, taking their cue from south of the border, as strong earnings from conglomerate General Electric boosted investors’ optimism.

FACTORS TO WATCH

* Canadian equity futures <0#SXF:> pointed to a higher open.

* U.S. stock index futures rose after two days of declines as strong earnings from General Electric and Google boosted investor optimism. [.N]

* Canadian retail sales rose more than expected in November, racking up their biggest increase since March 2010 on higher sales in the auto industry. [CAN-ECI]

* European shares rose, recovering some of the ground lost this week, with Spanish banks gaining on reports of nationalization of weaker players in the sector and energy companies rising on stronger crude prices. [.EU]

* Asian equities fell with Japan’s Nikkei sliding 1.6 percent to cap its biggest weekly loss in three months, as lower commodities prices weighed on energy-related stocks and spurred profit-taking after a recent rally.

COMMODITY PRICE MOVES

* The Thomson Reuters-Jefferies CRB index .CRB, a global commodities benchmark, rose 0.46 percent in early trade.

* Oil rose after renewed confidence the European debt crisis would be solved knocked the dollar down against the euro and helped to spur buying across a range of commodities. [O/R]

* Gold touched a two-month low in Europe, pressured by a firmer appetite for assets seen as higher risk on expectations the economic recovery was gaining traction. [GOL/]

* Copper edged up, after falling more than 2 percent on Thursday, as the dollar fell but investors remained cautious about the effect monetary tightening in top consumer China would have on demand. [MET/L]

CANADIAN STOCKS TO WATCH

* Potash Corp. (POT.TO): Potash marketing company Canpotex Ltd signed a deal with China’s Sinofert Holdings Ltd to supply 600,000 tons of potash during the first six months of 2011. While Canpotex, the overseas potash marketing arm of Potash Corp, Mosaic and Agrium (AGU.TO), did not specify the price, it suggested it to be similar to those recently established for new seaborne imports of potash to China. [ID:nSGE70J0DN]

* Valeant Pharmaceuticals International Inc. (VRX.TO): European drugs regulators said on Friday they were recommending marketing authorization for GlaxoSmithKline’s and the company’s epilepsy drug Trobalt as an add-on treatment for partial onset seizures. [ID:nLDE70K13J]

* Canadian health sciences company Nordion Inc NDN.TO said on Thursday it posted a profit from continuing operations in its fiscal fourth quarter as performance improved across business segments. [ID:nN20154930]

* Dynacor Gold Mines Inc (DNG.TO): The company said its fourth-quarter gold production at its custom-milling plant in Peru doubled to 10,478 ounces and annual production surpassed its own expectations. [ID:nSGE70K08E]

* Midway Energy Ltd MEL.TO: The oil explorer said it expects to almost double production in 2011 and also raised its capital budget for the year [ID:nSGE70J0D9]

* North American Palladium Ltd. (PDL.TO): The precious metals company expects higher palladium production in 2011, and said it plans to expand its flagship Lac des Iles mine in Quebec. [ID:nSGE70J0DI]

ANALYST RECOMMENDATIONS

Following is a summary of research actions on Canadian companies reported by Reuters. [RCH/CA]

* Black Diamond Group Ltd BDI.TO target price raised to C$26 from C$24.50 at Raymond James

* Denison Mines DML.TO target price cut to C$2.90 from C$3 at Raymond James

* Zargon Oil and Gas Ltd ZAR.TO target price raised to C$21.50 from C$20.50 at Raymond James

$1= $0.99 Canadian Reporting by Kishan Nair and Bangalore Newsroom; editing by Jeffrey Hodgson

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