Canadian stocks made their way back into positive territory Tuesday after the Bank of Canada left its overnight rate unchanged, pressuring commodities and the nation’s currency.
The S&P/TSX Composite Index gained 51.03 points, to close the day at 11,572.21, as traders also took in a signal that the central bank is still leaning towards raising interest rates eventually, although it said the economic outlook is slightly weaker than in its previous forecast.
The Canadian dollar gained 0.24 cents to 98.76 cents U.S., after the BoC said it was keeping its key rate unchanged at 1%, reflecting a general slowing in global economic conditions.
The bank also maintained language in its accompanying statement which signaled an eventual tightening bias, indicating that rates would rise at some point.
Quebec aerospace manufacturer Heroux-Devtek Inc. is selling about one-third of its business for $300 million in cash. The deal affects Heroux-Devtek locations in Dorval near Montreal, Mexico, Texas and Ohio. Its stock soared $2.55 to 32.5% to $10.40.
The base metals sector was down as copper gave up early gains to decline three cents to $3.45 U.S. a pound. Lundin Mining was down 11 cents to $3.96.
First Quantum Minerals Ltd. lost 35 cents to $16.62 as the miner said it is temporarily suspending operations at its Guelb Moghrein copper-gold mine in Mauritania due to strike action by some of its workers. The company says it is in the midst of a government-facilitated mediation process to resolve the strike.
In the gold sector, Barrick Gold fell 38 cents to $35.01.
The TSX energy sector remained positive as Canadian Natural Resources leaped 86 cents, or 3.3%, to $27.34.
The information technology sector was ahead with CGI Group up 47 cents to $23.65 but Research In Motion Ltd. slipped nine cents to $7.00.
Industrials were supportive as Canadian National Railways rose 84 cents to $87.49.
Financials also provided lift with Royal Bank ahead 16 cents to $52.34.
In corporate news, AuRico Gold Inc. said Tuesday that René Marion, the gold miner’s president and CEO and a member of the board, resigned due to a health condition. He’ll be succeeded by Scott Perry, who has been with the company since 2008 as its chief financial officer.
AuRico also late on Monday trimmed its 2012 production outlook to 155,000 to 170,000 gold-equivalent ounces, pointing to high employee turnover during its second quarter.
Shares of AuRico lost $1.03, or 13.4%, to $6.64 following the news.
In economic matters, Statistics Canada revealed this morning that Manufacturing sales unexpectedly fell 0.4% in May following a downwardly revised 1.1% drop in April and a 2.0% jump in March. Market expectations were for a 0.6% increase in May.
The nation’s number-crunchers added that the decline in overall sales was limited by a sizable 65.8% surge in the aerospace sector that offset a sizeable portion of a 9.6% drop in the petroleum and coal component.
ON BAYSTREET
The TSX Venture Exchange doffed 6.60 points to 1,176.75. The Nasdaq Canada index shed 1.71 points to 340.28.
In all, eight of the 14 Toronto subgroups were lower on the day. Gold sank 1.4%, metals and mining were lower by 0.8% and materials trailed yesterday’s close by 0.6%.
The half-dozen gainers were buoyed by energy, ahead 1.4%, industrials, up 1%, while consumer discretionaries improved 0.8%.
ON WALLSTREET
U.S. stocks bounced back Tuesday as investors digested testimony from U.S. Federal Reserve Chairman Ben Bernanke and refocused on positive earnings.
The Dow Jones Industrials grew 78.33 points at the close to 12,805.50
The S&P 500 added 9.76 points to 1,363.40. The Nasdaq Composite Index was up 13.10 points to 2,910.04.
Bernanke told a Senate panel that risks to economic growth have heightened and that the Fed is "looking for ways to address the weakness in the economy should more action be needed."
Investors were looking for hints of additional stimulus, including the possibility of more bond buying, or quantitative easing. Bernanke was non-committal.
Goldman Sachs beat expectations and reported earnings per share of $1.78 U.S. on $6.63 billion U.S. in revenue.
Coca-Cola reported earnings per share of $1.21 U.S. on revenue of $13 billion U.S. Both figures were better than analysts' forecasts.
Shares of Johnson & Johnson were up after the company reported earnings per share of $1.30 U.S. and revenue of $16.5 billion U.S, which was lower than expected.
Facebook's stock continued to slide Tuesday, a day after shares fell 8%. After a botched public debut, the stock has struggled to move back toward its IPO price of $38 U.S. a share.
Sprint Nextel shares edged higher as the telecom company launched faster service in 15 U.S. cities. The new 4G LTE network is about 10 times faster than the commonly used 3G and is available on five of its phones.
Yahoo shares lost traction after the company named Marissa Mayer, a Google executive who was one of the first two dozen employees at the search leader, as its new CEO on Monday. Yahoo reports earnings after the closing bell Tuesday.
HSBC shares fell after a U.S. Senate report released late Monday said HSBC failed to prevent billions of dollars worth of money transfers that investigators believe were linked to drug cartels and terrorist groups.
Shares of toymaker Mattel were up after the company reported a 20% jump in second-quarter earnings, helped by strong sales of Barbie, Hot Wheels and American Girl.
Economically speaking, U.S. consumer prices rose at a 1.7% annual rate in June, unchanged from May.
The Federal Reserve reported that June industrial production rose 0.4%, beating economist expectations of 0.3%.
The price on the benchmark 10-year U.S. Treasury sagged, pushing the yield up to 1.50% from Monday’s 1.46%. Treasury prices and yields move in opposite directions.
Oil for August delivery regained 52 cents to $88.95 U.S. a barrel.
Gold futures for August delivery fell $2.10 to $1,589.50 U.S. an ounce.
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