Stocks flat at outset

Canada's largest stock market faded a bit at Tuesday's open as commodity prices surged on increased hopes of a policy easing in top metals user China and as German investor sentiment recorded its biggest jump ever.

The S&P TSX Composite Index dipped 8.06 points to start the day at 12,250.60.

The Canadian dollar rose 0.22 cents to 98.46 cents U.S., after the Bank of Canada announced it was keeping its trendsetting policy rate at 1% for another two months and raised its prediction for 2012 economic growth slightly to 2%.

The central bank says economic conditions around the world are deteriorating, but not necessarily for Canada.

Stocks to watch this morning include Toronto-Dominion Bank, reportedly joining BB&T Corp among the suitors in talks to acquire BankUnited Inc., according to a report by Bloomberg news.

Valeant Pharmaceuticals International raised its offer for ISTA Pharmaceuticals Inc to $7.50 per share and set a target price of $8.50 per share in cash after a meeting between the companies' top executives.

Inmet Mining Corp. said it expects to produce at least 18% more copper in 2012, while lower grades are seen to drive zinc production down by about 19 to 27 percent.

Lundin Mining said copper production rose 10% in the fourth quarter, helped partly by strong results at its Neves-Corvo mine in Portugal.

Capstone Mining Corp said fourth-quarter production rose 5%, helped by higher output from its Cozamin mine in Mexico, but said production at its Minto mine in Yukon was below its expectations.

Harry Winston Diamond Corp. said recovery at the Diavik mine in Canada's Northwest Territories was slightly less than its expectations in 2011.

Primero Mining Corp said quarterly gold production fell about 7%, hurt by lower ore grades and lack of grade predictability.

Mercator Minerals Ltd. said it has obtained permits to start mining at its wholly-owned El Pilar Project in Mexico.

Elsewhere on the economic front, Statistics Canada reported this morning that foreign investment in Canadian securities strengthened in November with non-residents adding $15.0 billion to their holdings, the largest such inflow of funds since May.

On the other side of the coin, Canadian investors purchased $2.8 billion of foreign securities, evenly split between stocks and bonds.

ON BAYSTREET

The TSX Venture Exchange gained 10.73 points to 1,549.66, while the Nasdaq Canada index inched up 4.86 points to 397.69

Nine of the 14 Toronto subgroups began the day positively. Global base metals advanced 1.8%, metals and mining gained 1.6%, while industrials picked up 0.8%.

The four laggards were weighed by information technology, gold, and materials, each off 0.8%.

Consumer discretionaries were flat at the outset.

ON WALLSTREET

In New York, stocks started the week higher Tuesday, as global investors welcomed data that showed China's economic growth slowed, but not as much as feared.

The Dow Jones Industrials zoomed 110.57 points to start a short week at 12,532.60

The S&P 500 added 11 points to 1,300.09, while the Nasdaq Composite gained back 24.97 points to 2,735.64

Two major banks, Citigroup and Wells Fargo, released their quarterly results before the opening bell.

Citigroup shares fell 3.5% after its earnings and revenue fell short of forecasts. Wells Fargo shares rose 3% after it beat estimates.

Goldman Sachs reports its results before the market opens Wednesday, while Bank of America and Morgan Stanley are scheduled to release their reports ahead of the opening bell Thursday.

Shares of Carnival plummeted 14% in premarket trading. The company owns the Costa Cruises luxury ship that ran aground Friday. At least six people died in the wreck. Carnival said Monday it expects to lose at least $85 million U.S.

U.S. markets were shuttered Monday for Martin Luther King Day, so Tuesday also marked the first trading day for American markets to react to Standard & Poor's downgrade of nine euro-zone governments, announced Friday evening.

However, fears about Europe's debt crisis still hang in the balance. A Fitch official told Reuters Tuesday, that "Greece is insolvent so it will default." Greek officials and private investors are set to resume debt talks on Wednesday.

China's government said the country's economy grew at an annual rate of 8.9% in the last three months of 2011, which wasn't quite as slow as economists had expected.

Treasury prices for the 10-year note eased, pushing yields up to 1.86% from Friday's 1.85%. Treasury prices and yields move in opposite directions.

Oil for February delivery gained $1.71 to $100.42 U.S. a barrel.

Gold futures for February delivery rose $30 to $1,660.80 U.S. an ounce.