Markets in Toronto gained strength on Tuesday – after their biggest single one-day percentage loss in eight weeks -- as investors expect the U.S. Federal Reserve to begin tapering its monetary easing policy as early as next month.
The S&P/TSX composite index added 32.97 points to start Tuesday’s session at 12,620.99
The Canadian dollar dipped 0.44 cents to 96.23 cents U.S.
CIBC cut the target price on Leisureworld Senior Care Corp. to $12 from $12.75 after the company posted second-quarter results below expectations. Leisureworld shares declined 21 cents to $10.32.
CIBC cut the rating on Partners Real Estate Investment Trust to sector underperformer from sector performer to reflect expectations for below-average total returns over the next 12 to 18 months on a risk-adjusted basis. Partners units fell 23 cents to $6.22
In the economic docket this morning, Statistics Canada reported that its wholesale trade index plummeted 2.8% in June, with declines pretty much across the board. The loss offset what had been gained in the two months before.
ON BAYSTREET
The TSX Venture Exchange dropped 3.03 points to 930.62
Nine of the 14 Toronto subgroups were higher in the first hour, led by gold, ahead 2.1%, materials, strengthening 1%, and utilities, recovering 0.5%.
The five laggards were weighed mostly by metals and mining stocks, down 0.6%, industrials, off 0.3%, and energy, down 0.2%.
ON WALLSTREET
U.S. stocks barely moved in early trading Tuesday, but investors focused on earnings reports from several prominent retailers.
The Dow Jones Industrials poked up 11.08 points to open Tuesday at 15,021.80
The S&P 500 index inched up 1.81 points to 1,647.87. The NASDAQ added 10.90 points to 3,599.99
The Dow and S&P 500 recorded their first four-day losing streaks of the year. Still, the indexes are both up about 15% for the year, and the NASDAQ has gained 19%.
J.C. Penney posted a loss that was even worse than the forecasts. Despite that, the struggling retailer noted that its same store sales, a key measure for retailers, were slightly better than they were during the first quarter of 2013. Shares rose in early morning trading on the news.
Best Buy has also struggled recently, but appears to be a step ahead of J.C. Penney in the turnaround process. The electronics retailer reported a surge in profit, which CEO Hubert Joly attributed to aggressive cost-cutting. The stock was up about 10% Tuesday and has now gained 185% so far this year.
Home Depot announced a gain in quarterly net profit and raised its guidance for 2013. Rival Lowe's will report results tomorrow.
But not all the reports from retailers were good. Struggling bookseller Barnes & Noble recorded a loss and said revenue from its Nook tablet business were down 20% from the same quarter last year. The book store's stock plunged by about 12%.
The release Wednesday of minutes from the Federal Reserve's last monetary policy meeting will be closely watched for clues as to when the central bank will begin tapering its $85-billion-U.S.-a-month bond purchases.
More signals could come from the Kansas City Fed's annual conference in Jackson Hole, Wyoming, later this week.
Prices for the 10-year U.S. Treasury hiked, lowering yields to 2.82% from Monday’s 2.88%. Treasury price and yields move in opposite directions.
Oil prices faltered $1.76 cents to $105.34 U.S. a barrel.
Gold prices picked up $1.20 to $1,366.90 U.S. an ounce.
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