Stocks Hold onto Gains by Noon

Energy Still Leads Charge


Markets in Canada’s largest centre inched higher on Thursday morning as gains for heavyweight banking stocks offset declines for gold and base metal miners hurt by the U.S. Federal Reserve's signal of another interest rate increase this year.

The S&P/TSX Composite Index recovered from an earlier slump and tacked on 44.89 points to greet noon hour at 15,434.49

The Canadian dollar nicked up 0.03 cents to 81.12 cents U.S.

The materials group, which includes precious and base metal miners and fertilizer companies, lost ground as gold prices fell after the Fed move and copper and other industrial metals lost ground in the wake of a stronger U.S. dollar.

Diversified miner Teck Resources was down 1.8% at $26.42, and Kinross Gold Corp fell 2% to $5.25.

Eldorado Gold, however, jumped 2.9% to $2.83 as the miner temporarily backed down on a threat to halt Greek investment after "constructive" talks with the country's government.

Bank of Nova Scotia gained 1% to $78.69, while Toronto-Dominion Bank, Canada's biggest bank by assets, rose 0.6% to $68.92 after it re-entered the Japanese market with a fixed-income sales desk.

On the economic ledger, Statistics Canada reported Thursday morning that wholesale sales rose 1.5% to $62.4 billion in July, following a 0.6% decline in June.

Sales were up in five of the seven sub-sectors, representing 86% of total wholesale sales.

The agency also revealed the number of Canadians drawing regular employment insurance benefits jumped in July for the first time in eight months as 536,600 people received regular EI benefits, up 6,800, or 1.3%, from June.

ON BAYSTREET

The TSX Venture Exchange remained negative 1.19 points to 775.47

All but three of the 12 TSX subgroups were positive by noon hour, with energy zooming 0.7%, industrials up 0.6%, and financials ahead 0.5%.

The three laggards were information technology, sagging 0.3%, telecoms, skidding 0.2%, and utilities, hesitating 0.1%.

ON WALLSTREET

U.S. stocks fell slightly on Thursday after the Dow Jones industrial average had touched a record led by bank stocks. Investors are now betting on another rate hike from the Federal Reserve by December.

The Dow lost 18.28 points from Wednesday’s all-time high at 22,394.31, after briefly being in the green, with Apple and Procter & Gamble contributing the most to the losses.

The S&P 500 subtracted 4.05 points from Wednesday’s all-time record to 2,504.19, with shares of major technology companies weighing down the index.

The NASDAQ fell 24.97 points to 6,431.08, with shares of Microsoft, Amazon and Facebook all down.

Financial stocks are expected to be active again following hawkish comments from the central bankers as higher interest rates generally correlate with increased profits for the sector. Shares of JPMorgan and Citigroup both climbed over 1% immediately after the announcement.

Regional banks were on pace for their fifth straight day of gains for the first time since Feb. 15.

Investors are also keeping an eye on information technology. Shares of Alphabet fell 0.4% after subsidiary Google announced late Wednesday that it signed a $1.1-billion cooperation agreement with Taiwanese smartphone maker HTC to bolster its smartphone and emerging hardware business.

Nvidia was the worst performer in the S&P 500 after Tesla is working with AMD to develop its own AI chip for self-driving cars; shares fell 3.2%. Currently Tesla vehicles use Nvidia graphics processing units as part of the Autopilot self-driving hardware.

Apple is being scrutinized for its upcoming launch of the Apple Watch Series 3, which reportedly has an issue that could prevent the device from placing and receiving phone calls and text messages. The technology giant's stock weighed down the Dow, falling 1.7%

U.S. weekly jobless claims fell by 23,000 to 259,000, below expectations of 300,000.

The Fed announced Wednesday it will begin rolling off its $4.5-trillion balance sheet starting in October. The central bank did not raise its benchmark interest rate from its current 1% to 1.25% target, however, its updated rate forecast showed that another hike this year is likely.

Prices for the benchmark 10-year Treasury note peeked up, lowering yields to 2.26% from Wednesday’s 2.27%. Treasury prices and yields move in opposite directions.

Oil prices slipped off four cents a barrel to $50.65 U.S.

Gold prices sank $21.00 to $1,295.40 U.S. an ounce