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) 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) and rising commodity prices.
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.
Weak energy prices are also expected to weigh on the resource-heavy market as the price for the key U.S. crude oil dropped 0.9 percent to settle under $130 a barrel as a tropical storm was likely to miss key U.S. oil and gas facilities, diminishing supply concerns.
“Energy is what people look at when they come in in the morning and watch where the storm tracks,” said Ing. “That affects near-term more than anything else.”
Gold could help cushion some of the blow as the price for the precious metal rose 0.7 percent to $968.60 an ounce on the back of the weak U.S. dollar and soft global equity markets.
Investors will also take time to digest the latest Canadian economic numbers that showed Canadian retail sales rose a smaller-than-expected 0.4 percent in May from April due to weak sales by clothing stores. ($1=$1.01 Canadian) (Reporting by Scott Anderson; Editing by Frank McGurty)