The Toronto stock market registered a solid advance Thursday afternoon as the next likely leader of the U.S. Federal Reserve made it clear the American economy will need to show more improvement before the central bank starts to withdraw economic stimulus.
The S&P/TSX composite index gathered 60.72 points to close out Thursday at 13,431.38, with support also coming from strong earnings report from IT company CGI Group and one matching analyst expectations from Kinross Gold
The Canadian dollar dwindled 0.10 cents to 95.55 cents U.S.
The gold sector advanced while Goldcorp gained 61 cents to $25.90.
Kinross Gold Corp. reported a big drop in third-quarter net earnings amid falling gold prices and higher production costs. Kinross said net income fell to $49.9 million U.S. or four cents per share in the three months ended Sept. 30. Adjusted earnings were $54.4 million or five cents per share, in line with analyst estimates and its shares rose 20 cents to $5.40.
The tech sector was up as shares in CGI Group Inc. up $1.62, or 4.3%, to $39.24 after posting $141 million of net income in its fourth quarter, compared with a loss of $168 million a year ago.
Ex-items, earnings were 67 cents a share for the Montreal-based IT services company, five cents better than expected. CGI has been partially blamed for the huge problems related to the online launch of Obamacare.
The energy sector was ahead as Canadian Natural resources advanced 83 cents to $33.11.
Financials were also higher, but shares in Power Financial Corp. slipped 15 cents to $34.84 as third-quarter profit was down about 5% from a year ago to $434 million. Ex-items associated with the purchase of Irish Life by its Great-West Lifeco subsidiary, Power Financial's operating earnings were $476 million or 67 cents per share.
The base metals component was off while copper prices were flat after losing ground the two previous days, reflecting disappointment that a meeting of Chinese leaders earlier this week failed to yield hoped for economic reforms. The December contract unchanged at $3.16 U.S. a pound.
Turquoise Hill Resources fell 36 cents to $4.27. The fall came as the miner suspended work on development of its premier project, the copper mine at Oyu Tolgoi in Mongolia after the government said financing for the project would require parliamentary approval.
The company said Thursday that talks with the government are continuing but that it will be unable to complete project financing this year.
In the economic docket, Statistics Canada reported international merchandise exports grew 1.8% during September, while imports edged up 0.2%. As a result, our trade deficit with the world narrowed from $1.1 billion in August to $435 million in September.
The agency’s new housing price index came in unchanged for September, following a 0.1% advance in August.
ON BAYSTREET
The TSX Venture Exchange recovered 5.75 points to 931.63
All but two of the 10 TSX subgroups were positive, led by materials, up 1%, energy, up 0.9%, and consumer discretionary stocks, up 0.5%.
The two laggards were health-care stocks, down 0.5%, and consumer staples, down 0.4%.
ON WALLSTREET
Stocks ended modestly higher Thursday after Federal Reserve chair nominee Janet Yellen indicated in a Senate hearing that she will continue to support the economy with stimulus measures.
Investors were encouraged and sent the Dow Jones Industrial Average and S&P 500 to new records.
The Dow was up 54.59 points to 15,876.20
The S&P 500 index moved up 8.62 points to 1,790.62. The Dow is now just 1% from hitting 16,000, while the S&P 500 is less than 1% from 1,800.
The NASDAQ crept up 7.17 points to 3,972.74, as a drop in Cisco shares weighed on the tech-heavy index. Even so, the NASDAQ is now at its highest level since September 2000 and is less than 1% from 4,000.
Cisco shares tumbled more than 10% after the company reported weak sales for the fiscal first quarter and issued a weak outlook for the current quarter, too.
Cisco CEO John Chambers blamed a "hard to read" economic environment, adding that the U.S. government shutdown increased the "lack of confidence among business leaders."
Wal-Mart reported better-than-expected earnings, though the retailer missed on revenue and reported a slight decline in same-store sales in the U.S. Shares of department store chain Kohl's plunged following poor results and a weak outlook.
The bad news from these two retailers comes one day after Macy's ignited a retail rally thanks to its strong sales and guidance.
One observer noted that while Macy's and even Michael Kors are still attracting shoppers, the economy otherwise is forcing consumers to keep a tight grip on their wallets. Though thanks to the ongoing housing recovery, home improvement giants Lowe's and Home Depot are still improving.
Viacom reported a gain in quarterly revenue, driven by sales in media networks and filmed entertainment, and double-digit gains in net earnings.
Investors have been looking for clues as to when the Fed may begin scaling back its bond purchases. There has been speculation that the so-called tapering could begin as early as next month.
But during her question and answer session on Capitol Hill, Yellen said that the bond-buying program could still help the economy.
"It's important not to remove support, especially when the recovery is fragile," she said. "I believe it could be costly to withdraw accommodation or to fail to provide adequate accommodation."
The comments appear to have convinced investors that Yellen would continue the Fed's current $85-billion-U.S.-per-month bond-buying program for the next few months. The program -- also known as quantitative easing or 'QE' -- has helped spur stocks by pumping markets with extra cash.
Prices for 10-year U.S. Treasuries regained ground, lowering yields to 2.70% from Wednesday’s 2.72%. Treasury prices and yields move in opposite directions.
Oil prices faded 10 cents to $93.78 U.S. a barrel.
Gold prices hiked $18.30 to $1,286.70 U.S. an ounce.
Related Stories
