The Toronto stock market was higher Thursday but a big chunk of the gain came from a boost in gold prices as traders reckoned that the economic damage resulting from the partial U.S. government shutdown will further delay any plans by the Federal Reserve to cut back on key stimulus.
The S&P/TSX composite index climbed 79.15 points to end Thursday at 13,036.36
The Canadian dollar surged 0.34 cents to 97.18 cents U.S.
The gold sector ran ahead as Goldcorp improved by 93 cents to $25.34 while Barrick Gold climbed 89 cents to $19.12.
The base metals component rose even as December copper slipped one cent to $3.30 U.S. a pound. Teck Resources ran up 23 cents to $28.14.
Tech stocks led TSX decliners with CGI Group down $1.25 to $37.16.
The telecom sector was down after the federal government outlined plans in its throne speech Wednesday that would mandate an unbundling of cable TV offerings. There was also a promise to reduce smartphone roaming charges and Telus was off 28 cents to $34.47.
The energy sector slipped as Canadian Natural Resources fell 55 cents to $33.21.
On the economic beat, Statistics Canada reported that foreigners bought only $2.1 billion worth of our investments during August, down from past months, and mostly focused on corporate debt instruments.
The agency also said that Canadian investment in foreign securities rose to $5.7 billion, the largest investment since November 2012.
ON BAYSTREET
The TSX Venture Exchange sprinted ahead 25.70 points to 951.58
All but four of the 14 Toronto subgroups were positive by the end of the day. Gold rang 4.8% higher, while materials were boosted 2.7%, and real-estate advanced 1%.
The four laggards were weighed mostly by information technology, down 1.3%, telecoms, down 0.5%, and consumer staples, off 0.1%.
ON WALLSTREET
The S&P 500 touched a new record Thursday, but a batch of lackluster earnings weighed on the Dow Jones Industrials.
The Dow Jones Industrials faded 2.18 points to close at 15,371.10, dragged down by shares of IBM, which reported weak sales growth late Wednesday. Fellow Dow components Goldman Sachs and UnitedHealth were also under heavy pressure.
IBM and Goldman are the second and third highest weighted components in the Dow, which is weighted by stock price as opposed to market value like the S&P 500. UnitedHealth has the seventh biggest weighting.
The S&P 500 index hiked 11.53 points to 1,733.07, surpassing the previous all-time high from last month. The NASDAQ picked up 23.71 points to 3,863.15, but remains far from its record highs from 2000.
In corporate news, IBM shares sank 7% after the tech giant reported quarterly sales that fell well short of expectations. Shares of eBay fell 4% after the company offered weak guidance.
Shares of Goldman Sachs fell after the firm reported a year-over-year revenue decline. At the same time, Goldman's earnings per share topped forecasts and the company hiked its dividend by a nickel to 55 cents. UnitedHealth was down nearly 4% following its results.
Shares of UnitedHealth fell after the company trimmed its outlook for earnings growth this year.
AMR Corp., the parent of American Airlines that's now in bankruptcy, reported a record third-quarter operating profit. The company was also upgraded by analysts at JPMorgan, sending shares up 8%.
Dow component Verizon jumped after the company reported a double-digit profit increase for the quarter thanks to strong gains in wireless subscribers. Verizon also said it wasn't able to meet customer demand for new iPhones because of supply constraints. Apple shares edged higher after topping $500 U.S. a share earlier this week.
Google is set to report its latest quarterly results following the closing bell.
Stocks surged more than 1% Wednesday following news that Congress had reached a deal to reopen the federal government and avert a potentially catastrophic default. But the initial euphoria faded around the world Thursday and investors were beginning to wonder what happens when the government bumps up against the debt ceiling again in February.
China, the United States' biggest foreign creditor, welcomed the resolution of the debt ceiling crisis. But credit rating agency Dagong, which has close ties to the Chinese government, cut its rating on U.S. debt, saying the country was only able to remain solvent by raising new debts.
Investors were also concerned about the economic toll of the impasse, which shut down large parts of the government for 16 days. The shutdown comes with a $24-billion U.S. price tag, according to Standard & Poor's.
About 70,000 federal workers filed for unemployment benefits during the first week of October, the U.S. Labor Department reported Thursday. The shutdown, which started Oct. 1, put thousands of federal employees temporarily out of work and without a paycheque.
Prices for the 10-year U.S. Treasury gained strength, lowering yields to 2.59% from Wednesday’s 2.67%. Treasury prices and yields move in opposite directions.
Oil prices slid $1.61 to $100.68 U.S. a barrel.
Gold prices gained $36.90 to $1,319.20 U.S. an ounce.
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