The Toronto stock market experienced some losses at noon Friday as oil prices continued to hover around 15-month highs and traders took in earnings from American banking giants JPMorgan Chase and Wells Fargo that beat expectations.
The S&P/TSX Composite Index fell 16.42 points to pause at midday at 12,476.84
The Canadian dollar fell 0.23 cents to 96.25 cents U.S.
In the financial sector, Scotiabank said Friday that it has withdrawn its application to acquire a 19.99% stake in China's Bank of Guangzhou. The bank said in a statement that "since announcing the proposed investment in September of 2011 Scotiabank and the City of Guangzhou have re-evaluated the proposed partnership in light of changing conditions." Scotiabank shares rose 21 cents to $57.15.
Industrials advanced, as railway stocks gained ground amid a warning from credit rating agency Moody's that it expects the deadly train disaster in Lac-Megantic, Que., to make shipping oil by rail more costly, putting pressure on both major railways and oil producers. Canadian National Railways rose $1.96 to $105.97 while Canadian Pacific was $2.24 higher at $131.79.
The telecom group rose as BCE Inc. climbed 30 cents to $43.83.
The energy sector was ahead as growing tensions in Egypt and signs of higher demand in the U.S. pushed the August crude contract on the Nymex up. Canadian Natural Resources rose 23 cents to $33.52.
The gold sector declined as Barrick Gold Corp. faded 19 cents to $15.66 and Kinross Gold Corp. gave back nine cents to $5.05.
The base metals sector was down with copper prices depressed after China's finance minister suggested that growth could come in at 7% for this year, which is below the government's official forecast.
Surprisingly weak trade figures earlier this week raised the prospect that China's slowdown will be sharper than anticipated as China's central bank tightens credit to reduce financial distortions. China releases April-June growth figures on Monday morning and that could well determine trading next week.
The September copper contract on the New York Mercantile Exchange lost two cents to $3.15 U.S. a pound and Teck Resources declined 49 cents to $22.82 while HudBay Minerals slipped eight cents to $6.91.
In other corporate news, vaccine developer Medicago Inc. is selling a majority stake to Japan's Mitsubishi Tanabe Pharma in a friendly transaction valued at $357 million. Mitsubishi Tanabe will pay $1.16 in cash for each of the company's outstanding shares other than those indirectly held by Philip Morris International. That's a 22.1% premium to Thursday's closing price.
Paper company Domtar Corp. says it expects to post an operating loss of between $30 million and $35 million U.S. when it reports its second-quarter results later this month. Its shares fell $4.23 to $72.02.
ON BAYSTREET
The TSX Venture Exchange eked up 0.45 points to 894.36
Of the 14 Toronto subgroups, 10 were lower, anchored mostly by gold, down 1.9%, while metals and mining and their cousins in global base metals were each down 1.4%.
The four gainers were led by industrials, ahead 0.9%, telecoms, growing 0.5%, and consumer discretionaries, up 0.2%.
ON WALLSTREET
U.S. stocks wavered Friday afternoon, but remained near the record closing highs reached a day earlier.
The Dow Jones Industrials subtracted 22.34 points from Thursday’s all-time record to 15,438.60
The S&P 500 index demurred 2.22 points to 1,672.80. The NASDAQ Composite decreased 0.55 points to 3,577.76
As earnings season gets underway, the first of the big banks reported their results early Friday.
JPMorgan Chase reported quarterly earnings that beat expectations, while revenue just barely beat forecasts. But the stock was only slightly higher as some of the profit gains came from accounting adjustments rather than strong growth in the underlying business.
Wells Fargo shares rose almost 2% after the bank reported earnings and revenue that beat expectations.
Citigroup, Goldman Sachs, Bank of America and Morgan Stanley are on tap to report results next week.
Package delivery giant UPS lowered its outlook for profit growth this year, sending shares down more than 5%.
In economic news, the U.S. Bureau of Labor Statistics released its monthly report on the producer price index, showing an increase of 0.8% in June. That's nearly triple the expected increase of 0.3%. The gains were largely driven by a spike in gasoline prices.
The University of Michigan and Thomson Reuters' Consumer Sentiment Index for July declined slightly, and fell short of expectations.
Prices for the 10-year U.S. Treasury sagged, boosting yields to 2.58% from Thursday’s 2.57%. Treasury prices and yields move in opposite directions.
Oil prices added 55 cents to $105.46 U.S. a barrel.
Gold prices chucked three dollars to $1,276.90 U.S. an ounce.
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