Stocks head for lower open as Goldman Sachs revenue disappoints; oil falls

By Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market could be headed for a lower open amid flat oil prices ahead of the release of U.S. inventory data and investor disappointment with Goldman Sachs Group Inc.'s investment banking revenue in the latest quarter.

New York futures pointed to a lower open a day after positive earnings reports from JPMorgan Chase and Intel beat expectations, sending the Dow Jones industrials past the 10,000-mark for the first time in a year.

The Dow industrial futures lost 40 points to 9,912, the Nasdaq futures slipped 8.2 points to 1,739.5 while the S&P 500 futures lost 6.3 points to 1,081.4.

The Canadian dollar was lower, down 0.69 cent to 96.79 cents US after a weak U.S. dollar helped sent the loonie up a full cent on Wednesday.

Goldman Sachs said Thursday that it earned US$3.19 billion, or US$5.25 per share in the third quarter. Analysts had been expecting earnings of $4.24 per share, on average.

However, investors are reacting coolly to the firm's results as revenue from its mergers and acquisitions operations dipped sharply from the previous quarter, reflecting the general slowness in takeover activity. That is helping send shares nearly two per cent lower in premarket trading.

Results from JPMorgan set a high bar for its peers on Wednesday, reporting a US$3.59 billion profit that came in well above Wall Street's expectations.

Also depressing sentiment was world-leading mobile phone maker Nokia Corp. The Helsinki-based company reported a loss of euro559 million (US$832 million) in the third quarter, taking hits from a 20 per cent drop in sales and a one-time charge for the fallen value of its network equipment unit.

Nokia made a profit of euro1.09 billion (US$1.61 billion) in the same quarter of 2008 and its shares fell more than nine per cent in pre-market trading in New York.

Meanwhile, energy stocks could be in for a weak start to the session as the November crude contract on the New York Mercantile Exchange lost 14 cents to US$75.04 a barrel.

Other commodity prices were also soft as the December bullion contract on the Nymex eased $13.90 to US$1,050.80 while December copper lost five cents to US$2.79 a pound.

In other corporate news, Canwest Global Communications Corp. said it has been notified by the Toronto Stock Exchange that its subordinate voting shares (TSX: CGS.TO) and non-voting shares (TSX: CGS-A.TO) will be delisted at the close of trading Nov. 13 because of failure to meet listing requirements. Trading in the shares will be suspended.

In Asia, stocks had rallied hard, as investors caught up with the gains posted in Europe and the U.S. Wednesday.

In Japan, the Nikkei 225 stock average gained 1.8 per cent, and Hong Kong's benchmark added 0.5 per cent, hitting a new high for the year during trade.

London's FTSE 100 index was down 0.6 per cent, Frankfurt's DAX fell 0.7 per cent while the Paris CAC 40 declined 0.4 per cent.