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What you need to know before markets open

Canada’s main stock index looked set to open lower on Thursday as wariness over the stalled U.S. budget negotiations overshadows the Federal Reserve’s announcement of a fresh stimulus program. Here's what you need to know

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Canada’s main stock index looked set to open lower on Thursday as wariness over the stalled U.S. budget negotiations overshadows the Federal Reserve’s announcement of a fresh stimulus program.

TOP STORIES

* Sharp differences remained on Wednesday between congressional Republicans and the White House in talks to avert the government going over the “fiscal cliff” of steep tax hikes and budget cuts, and negotiators warned the showdown could drag on past Christmas.

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* The Federal Reserve on Wednesday took the unprecedented step of saying it would keep interest rates near zero until the jobless rate falls to 6.5%, well below its current level, and it promised to pump more money into the economy.

* Eurozone finance ministers and the International Monetary Fund have agreed to release 49.1-billion euros in aid to Greece by the end of March, with most of that sum flowing immediately, senior EU officials said.

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* A U.S. federal agency is set to trial Research In Motion’s new BlackBerry 10 smartphone after recently ditching the brand in favor of Apple Inc’s iPhone, in a boost for the embattled Canadian company.

* Barclays Plc plans to cut as many as 2,000 jobs in its investment bank as part of a broad restructuring of the company, the WSJ reported, citing people familiar with the British bank’s plans.

* Sprint Nextel Corp is looking to buy Clearwire Corp stock it does not already own for US$2.90 per share, it said in a regulatory filing.

MARKET SNAPSHOT

* Canada stock futures traded down 0.18%

* U.S. stock futures , were mixed around -0.1% to 0.08%

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* European shares, were down

COMMODITY PRICE MOVES

* Thomson Reuters-Jefferies CRB Index : 294.0947; fell 0.52%

* Gold futures : $1,692.4; fell 1.41%

* US crude : $86.28; fell 0.56%

* Brent crude : $109.02; fell 0.44%

* LME 3-month copper : $8,036.75; fell 1.15%

CANADIAN STOCKS TO WATCH

* Thomson Reuters : The news and information company said it wanted to play a role administrating overhauled interbank lending rates after British regulators told the news and information company it was not part of a global probe into rate fixing.

ANALYST RECOMMENDATIONS

Following is a summary of research actions on Canadian companies reported by Reuters:

* Bonterra Energy Corp. – CIBC raises target to $49.50 from $47 after the company announced its intention to acquire Spartan Oil Corp for about $441-million and said the transaction will be accretive to its valuation.

* Foraco International SA – Canaccord Genuity raises to buy from hold on improved visibility and share price depreciation.

* Longview Oil Corp. – CIBC cuts target price to $6.75 from $7.75 after the company announced lower-than-expected full-year estimates.

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* Research In Motion – Jefferies raises price target to $13 from $10, says the company had a decent November quarter and is seeing better developer support for the new BlackBerry 10.

* TransGlobe Energy Corp. – CIBC raises to sector outperformer from sector performer on the recent decline in the company’s share price and its momentum going forward into 2013.

ON THE CALENDAR

* Major Canadian economic data includes new housing PI and capacity utilization.

* Major U.S. events and data includes initial claims, continuing claims, producer prices index, retail sales and business inventories.

U.S. STOCKS

U.S. stock index futures were mixed on Thursday as a new round of stimulus for the economy was not enough to offset worries over the impact of the impending “fiscal cliff.”

* In the European Union, finance ministers reached a deal to make the European Central Bank the bloc’s top banking supervisor. The move could boost confidence in leaders’ ability to tackle the region’s sovereign debt crisis.

* But the set of U.S. tax hikes and spending cuts that are set to come into effect in the new year remained at the forefront of investors’ minds. Negotiators on Wednesday warned the showdown over reaching a deal could drag on past Christmas.

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* The Federal Reserve on Wednesday announced a fresh bout of stimulus for the U.S. economy, but markets focused on comments from Chairman Ben Bernanke, who reiterated that monetary policy would not be enough to offset going over the fiscal cliff.

* Investors are worried that doing so could send the economy back into recession, though most expect a deal will be struck eventually.

* The central bank also took the unprecedented step of indicating interest rates would remain near zero until unemployment falls to at least 6.5%.

* In a busy day of data, reports on U.S. producer prices, retail sales and first time claims for unemployment benefits will all be released at 8:30 am ET (1330 GMT). Business inventories are due at 10:00 am ET (1500 GMT).

* S&P 500 futures fell 0.70 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures were up 11 points, while Nasdaq 100 futures added 1.25 points.

* Sprint Nextel Corp is looking to buy Clearwire Corp stock it does not already own for $2.90 per share, it said in a regulatory filing. Shares of Clearwire were up 5.5% at $2.90 in premarket trading.

* Knight Capital Group Inc expects to make a decision on its future ownership by early next week, the Wall Street Journal reported, citing people familiar with the matter.

* Australia’s GrainCorp Ltd rejected a sweetened US$2.9-billion bid from Archer Daniels Midland Co. Analysts said ADM was likely to lift its bid for the company.

© Thomson Reuters 2012

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