The Toronto stock market fell however slightly Wednesday afternoon, despite strong earnings reports from Canada's two big railways and glum news from China's financial sector.
The S&P/TSX composite index dropped 4.74 points to close at 13,243.22
The Canadian dollar dumped 0.89 cents to 96.30 cents U.S.
The industrials sector led TSX advancers after Canada's two largest railroads both reported strong earnings results that beat analyst estimates on several key measures.
Canadian National Railway said after the close Tuesday that quarterly profits climbed 6.1% to $705 million. CN also posted adjusted earnings of $1.72 a share, a dime better than estimates. Revenue came in at $2.7 billion, against estimates of $2.64 billion and its shares ran up $4.84, or 4.4%, to $114.59 after hitting a new 52-week high of $115.79.
On Wednesday, Canadian Pacific Railway posted record earnings and the lowest operating ratio in its history in the third quarter as revenue rose by 6% from last year to $1.5 billion.
CP's net income was $324 million or $1.84 per diluted share, up from $224 million or $1.30 per share in the third quarter of 2012. CP's operating ratio improved to 65.9% down from 74.1%. Shares for CP vaulted $13.79, or 10.2%, to $148.53.
Beyond the strong performance in the industrials sector, telecom stocks were also supportive, up one per cent as Telus climbed 72 cents to $36.47.
The market was dragged down by drop in the base metals sector as December copper lost seven cents to $3.27 U.S. a pound. Teck Resources fell 31 cents to $29.41.
The energy sector was down as crude prices hit their lowest level since late June. Suncor Energy fell 85 cents to $36.64.
Losses piled up amid data showing a much larger than expected buildup of supplies last week.
The gold sector was down as Goldcorp faded 42 cents to $26.57
On the economic slate, the Bank of Canada left its overnight interest rate unchanged at 1%, where it’s now been since September 2010. The bank’s next rate-setting decision is Dec. 4.
ON BAYSTREET
The TSX Venture Exchange erased 4.81 points to 966.87
The 14 Toronto subgroups were evenly divided between gainers and losers, the former group led by industrials, improving 2.9%, while utilities took on 0.9% and health-care stocks gained 0.8%.
The seven laggards were weighed most heavily by metals and mining, off 2.7%, while gold lost 2.3% and materials slid 1.4%.
ON WALLSTREET
Stocks retreated from record highs Wednesday as investors focused on corporate earnings, including a dour outlook from economic bellwether Caterpillar.
The Dow Jones Industrials doffed 54.33 points to 15,413.30
The S&P 500 index lost 8.29 points to 1,746.38. The NASDAQ backtracked 22.49 points to 3,907.07
Dow component Caterpillar reported a slump in sales and earnings, noting that a slowdown in the mining sector has taken a bite out of heavy equipment manufacturing. Caterpillar shares were down 6%.
But Boeing, which is also in the Dow, rose 5% after the company reported a surge in quarterly profit and revenue as the aircraft manufacturer works its way through a backlog of orders.
It appears the government shutdown did not have a big impact on defense contractors. Rival Northrop Grumman reported earnings and sales above expectations and raised its outlook for the year. Lockheed Martin also reported strong results on Tuesday, sending its stock sharply higher.
Shares of Broadcom sank 3% after the chipmaker said Tuesday that sales will be below analysts' expectations in the fourth quarter.
AT&T reported earnings after the closing bell that topped forecasts. Sales were roughly in line with estimates.
So far, 80 of the 130 S&P 500 companies have beat expectations, according to S&P Capital IQ. But many analysts still expect relatively weak earnings for the rest of the year.
Shares of Corning rallied after the company announced a $2-billion U.S. stock buyback, as well as a deal to take full control of a partnership with Samsung Display, which manufactures LCD glass used by makers of smartphones and tablets.
Netflix shares bounced back from a sharp decline Tuesday, even though hedge fund manager Carl Icahn revealed late Tuesday that he had reduced his stake in the company. Despite the rebound, some traders still see more downside ahead for Netflix shares.
Apple rose 1%. Icahn tweeted late Wednesday that he has sent a letter to Apple CEO Tim Cook, and that the letter will be available Thursday on a new website Icahn is launching. Icahn took a stake in Apple earlier this year and has been pressuring the company to give back some of its cash to shareholders through a bigger stock buyback
Prices for the 10-year U.S. Treasury gained strength, lowering yields to 2.49% from Tuesday’s 2.51%. Treasury prices and yields move in opposite directions.
Oil prices fell $1.39 to $96.91 U.S. a barrel.
Gold prices sank $9.60 to $1,333 U.S. an ounce.
Related Stories
