The Toronto stock market appeared set to exit May trading with a gain on Thursday, following up on strong earnings reports from two of Canada’s big banks and major acquisition news from Canada’s tech sector.
The S&P/TSX Composite Index fought its way into the green by the close, gaining 78.58 points to end a brutal month at 11,511.80
The Canadian dollar traded lower by 0.27 to 96.82 cents U.S.
Most traders are happy to see an end to this month as worries about the euro-zone, worsening economic conditions in the region and slower Chinese economic growth have resulted in sharp losses.
The TSX is down well over 7% for the month, losing 176 points alone on Wednesday, weighed down particularly by the resource sector as commodity prices have sunk to multi-month lows.
Canada’s largest IT services company, Montreal-based CGI Group, plans to more than double the size of its global workforce and total revenue through a friendly, $3.1-billion deal to acquire U.K. firm Logica PLC.
CGI shares surged $2.94 or 14% to $23.95.
The TSX financial sector was up after CIBC said it earned $811 million of net income in the second quarter, up from $767-million in the comparable period last year.
That amounted to $1.90 per diluted share of net income, or $2 per share on an adjusted basis, 12 cents higher than analyst expectations. CIBC’s total revenue was just under $3.1 billion and its shares rose $1.48, or 2.1%, to $71.81.
National Bank of Canada shares added 79 cents to $73.93 as it reported a $553-million profit in the second quarter, up 69% from the same time last year. The bank also announced it was increasing its quarterly dividend to common shareholders by 5% to 79 cents per share.
Excluding special items, National Bank had $347 million of net income in the three months ended April 30, up 6% from a year earlier.
Commodity prices added to Thursday’s losses and the base metals sector fell with copper extending Wednesday’s seven-cent slide, down five cents at $3.35 U.S. a pound. Teck Resources fell 47 cents to $30.82 and Ivanhoe Mines lost 37 cents to $9.69.
The energy sector slid with Canadian Natural Resources dropping 28 cents to $29.57 while Suncor Energy gave back 22 cents to $27.93.
The gold sector was up as Barrick Gold Corp. improved by 17 cents to $40.41.
On the economic ledger, Statistics Canada said average March weekly earnings of non-farm payroll employees totaled $888.34, up 0.8% from the previous month, or 2.1% on a year-over-year basis.
ON BAYSTREET
The TSX Venture Exchange eked up 0.30 points to 1,289.73. The Nasdaq Canada index regained 0.70 points to 356.43
Nine of the 14 Toronto subgroups were up by the closing bell, propelled higher by information technology, screaming up 3.3%, financials, perking 1.5%, and consumer staples, 1.3% to the good.
The five laggards were weighed mostly by metals and mining stocks, which eased 0.7%, while global base metals and materials each tailed off 0.4%
ON WALLSTREET
U.S. stocks straddled the breakeven line Thursday afternoon, on track to end a wretched month on a weak note.
The Dow Jones Industrials remained in the red 26.41 points to end the day and the month at 12,393.50
The S&P 500 erased 0.31 points to 1,313.01. The tech-rich Nasdaq Composite Index deducted 10.02 points to 2,827.34
The S&P 500 and Dow are down almost 6% in May, and headed for their worst monthly losses since November 2011. In fact, the Dow has only been up five days so far this month.
Meanwhile, the Nasdaq has tumbled almost 7% and is on track for its worst monthly performance in two years.
As stocks have tumbled, investors have rushed toward the safety of U.S. Treasuries, pushing the 10-year yield to record lows.
Thursday's declines were driven by a batch of weak U.S. economic data, including reports on initial jobless claims and regional manufacturing, which cast a cloud over hopes that the domestic economy is improving.
Shares of Joy Global fell after the mining equipment maker easily beat forecasts but lowered its guidance.
Networking equipment maker Ciena reported earnings that blew past analysts' estimates and issued a forecast in line with expectations, lifting shares.
Shares of TiVo fell after the DVR maker reported a larger-than-expected quarterly loss after the bell Wednesday.
Shares of Facebook continued their move down, hitting a fresh low of $26.83 U.S.
Investors also continued to keep tabs on Europe's debt crisis.
Germany's unemployment figures, along with a decline in euro-zone inflation, helped lift sentiment in overseas markets. Germany reported an adjusted unemployment rate at a two-decade low of 6.7%.
Later in the day, voters in Ireland are expected to approve more stringent budget rules in a referendum. The struggling country could lose access to additional bailout funds if voters reject the fiscal treaty, so a positive vote could reassure investors. Markets have also been nervous that Greek voters could reject austerity measures and force that country out of the euro-zone.
Meanwhile, investors are still worried about Spain not being able to fund bank bailouts that could reach as much as €100 billion. Yields on 10-year Spanish debt soared to 6.6% Wednesday, but retreated slightly on Thursday.
Economically speaking, gross domestic product for the first quarter was revised lower to 1.9%.
A report on private sector hiring from payroll services firm ADP showed a gain of 133,000 jobs, less than the 157,000 gain forecast by economists.
Additionally, the number of people filing for first-time unemployment benefits in the U.S. rose 10,000 to 383,000 in the latest week, which was higher than the expected 368,000 forecast by analysts.
The latest batch of jobs reports comes before the government's closely-watched monthly jobs report, which is due Friday. Analysts expect that the U.S. economy added 150,000 jobs in May, including 12,000 government cuts. The unemployment rate is expected to stay at 8.1%.
The Chicago Purchasing Manager Index, which tracks manufacturing activity in much of the Midwest, fell for a third straight month to 52.7, the lowest level since May 2009.
The index was expected to come in at 57 for May, up from 56.2 in the month prior. The report is seen an indicator of what will happen with the national reading on manufacturing from the Institute of Supply Management, due on Friday.
Foreclosures accounted for 26% of home sales during the first three months of the year, according to a report released Thursday by RealtyTrac
The price on the benchmark 10-year U.S. Treasury rose yet again, lowering yields to 1.58%, even below Wednesday’s record low of 1.62%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil continued its tumble, losing 83 cents Thursday to $86.70 U.S.
Gold futures for June delivery slipped 80 cents to settle at $1,562.60 U.S. an ounce.
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