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TORONTO: Investors in Canada and the United States were cautious ahead of the release of the latest economic growth data for both countries.

Statistics Canada is expected to report that gross domestic product in August rose 0.3 per cent following a 0.1 per cent drop in July.

The Canadian dollar was down a slight 0.03 of a cent prior to the release of the report at 8:30 a.m. EDT amid a stronger U.S. dollar.

In the U.S., economists expect American gross domestic product grew at a meager two per cent annual rate during the third quarter, which is far short of what would be needed to reduce the high unemployment rate.

However, a two per cent growth rate would mark a small improvement from the 1.7 per cent rate reported by the United States during the second quarter.

Investors expect the latest reading of U.S. economic growth to reinforce views that the Federal Reserve will provide further stimulus.

The U.S. central **>bank<** is expected to buy Treasury bonds, through a process known as quantitative easing, to stimulate the U.S. economy.

``The market remains fixated on the size of the quantitative easing,'' Singapore's DBS **>bank<** said in a report.

DBS said it expects the Fed to announce initial bond purchases of between US$200 billion and US$300 billion while some investors are looking for a program between US$500 billion and US$1 trillion.

``Herein lies the fear for disappointment,'' DBS said.

The details of any stimulus are expected to be announced when the Fed meeting wraps up Nov. 3.

U.S. futures pointed to a lower market open ahead of the release of the GDP data with the Dow Jones industrial average down 30 points to 11,019, the Nasdaq futures dipped 6.75 points to 2,119 and the S&P 500 futures declined six points to 1,173.

The stronger greenback along with caution ahead of next week's Federal Reserve meeting and U.S. midterm elections depressed oil prices, with the December crude contract on the New York Mercantile Exchange down 48 cents to US$81.70 a barrel.

The December copper contract on the Nymex was five cents lower to US$3.74 a pound while December bullion slipped $1.40 to US$1,341.40 an ounce.

In Asia, the Nikkei 225 stock average closed down 1.8 per cent amid data showing that Japan's industrial production fell for the fourth straight month in September, underscoring the country's fragile recovery. Factory output tumbled 1.9 per cent from the previous month as makers of cars and electronic devices cut production, much worse than a 0.6 per cent fall forecast by analysts.

South Korea's Kospi lost 1.3 per cent, China's benchmark Shanghai Composite Index dropped 0.5 per cent and Hong Kong's Hang Seng shed 0.5 per cent.

London's FTSE 100 index dipped 0.42 per cent, Frankfurt's DAX dipped 0.23 per cent and the Paris CAC 40 was down 0.34 per cent.

It's a relatively quiet day for earnings reports after investors digested a mixed bag this past week by several corporate heavyweight.

On Friday, paper and wood products producer Domtar Corp (TSX:UFS) had $191 million or $4.44 per share of net income in the third quarter, with $1.47 billion of sales. Adjusted income was $4.26 per share, which was ahead of analyst estimates.

And aircraft parts maker Heroux-Devtek Inc. (TSX:HRX) reported second quarter net income fell to $2.6 million, or eight cents per share, from $3.5 million, or 11 cents per share, a year ago. Consolidated sales rose to $83.2 million from $76.6 million.

On Thursday after the market close, Microsoft Corp. said its profit jumped because businesses increased their spending on technology.

Microsoft's net income rose 51 per cent to US$5.4 billion, or 62 cents per share, from US$3.6 million, or 40 cents per share, in the same period last year.

Revenue increased 25 per cent to US$16.2 billion, from US$12.9 billion a year ago.