The Toronto stock market maintained a modest gain Wednesday as energy stocks rose after the latest reading on American crude inventories and financials advanced on a report that aid could be forthcoming for U.S. insurers.
New York markets registered slight gains as a dismal read of economic conditions by the U.S. Federal Reserve competed with a buyout deal in the homebuilding industry and a disappointing start to the U.S. corporate earnings season.
Toronto's S&P/TSX composite index gained 144.53 points to close at 8,969.28.
Worries about companies' first-quarter earnings reports, and their forecasts for the remainder of the year, have rattled the market this week, giving most major indexes extended losses after four straight weeks of massive gains.
However, the rally has so far boosted the TSX about 17% and the Dow 19%.
The TSX financial sector was up with National Bank ahead 49 cents to $41.25.
Manulife Financial Corp. advanced 26 cents to $16.42 while Sun Life Financial climbed $1.06 to $24.81.
The TSX energy sector shook off early losses, rising after crude inventories rose less than analysts forecast last week, climbing by 1.7 million barrels, against an expected increase of 2.3 million barrels.
Suncor Inc. gained $1.06 to $30.24 and Canadian Natural Resources was up 75 cents to $52.22.
The tech group supported the TSX, rising as Research In Motion Ltd. advanced $2.69 to $76.70.
Canadian investors also took in earnings reports from the retail and media sectors.
The Forzani Group Ltd. owner of chains such as Athletes World, reported profit of $24.2 million for the quarter ended Feb. 1, down from $28.7 million a year earlier amid slumping sales. But its shares advanced 28 cents to $9.57.
Shares in clothing retailer Reitmans (Canada) Ltd. fell $1.51 to $9.99 as fourth-quarter net earnings plummeted 75.8% to $9 million on Quebec income tax reassessments. Sales slid 2.9% to $261.8 million.
Cable and Internet provider Shaw Communications Inc. says its second-quarter profit fell to $156 million from a year-earlier $113 million, but revenues improved 10%.
The Calgary-based company says the lower earnings were due to a variance in the amount of tax recovery it received in the comparable quarters and its shares rose seven cents to $19.38.
Corus Entertainment Inc. said today its quarterly net profit came in at $29 million, a drop from net income of $35.4 million during the same quarter the year before. Its shares were 17 cents higher to $14.
Economically, Canadian direct investment abroad rose 24% in 2008, largely the result of the substantially weaker Canadian dollar. Statistics Canada reports the depreciation of the Canadian dollar against most foreign currencies added $82.8 billion to the overall Canadian direct investment position abroad.
The Canadian dollar lost 19% against the U.S. dollar last year after reaching parity at the end of 2007; it also depreciated 15% against the euro and 34% against the Japanese yen, but gained about 11% on the British pound. Foreign direct investment in Canada grew by 3% in 2008.
Canadian housing starts rose for the first time in seven months in March on higher construction of multiple-unit buildings, according to Canada Mortgage and Housing Corporation.
The annualized rate of 154,700 units increased from a more than eight-year low of 136,100 units in February. Economists anticipated the pace of starts would slow to 130,000 units from an initially reported 134,600 units, according to the median of 21 responses in a Bloomberg survey.
The Canadian dollar was up 0.05 cents to 80.86 cents U.S.
ON BAYSTREET
Of the 13 TSX subgroups, nine were positive. Metals and mining were up 3.1%, followed by health-care stocks, up 2.6%, and information technology, ahead 2.3%.
Of the four groups in negative territory, consumer staples weighed the most heavily, followed by technology, down 0.3% and utilities, off 0.2%.
The TSX Venture Exchange was off 1.78 points to 950.70 while the Nasdaq Canada Index gained 17.26 points to 592.26.
ON WALLSTREET
The Dow Jones Industrials average increased 47.55 points to end Wednesday’s trading at 7,837.11
The S&P 500 index improved 9.60 points to 825.15, while the Nasdaq restored 29.50 points to 1,590.66.
Pulte Homes has agreed to buy Centex Corp. in a stock transaction worth $3.1 billion U.S., including $1.8 billion U.S. of debt, the companies said Wednesday. Under the agreement, Centex shareholders would get 0.975 share of Pulte common stock for each share they own, resulting in a 38% premium for Centex holders based on Tuesday's closing price.
Pulte shares fell $1.22 to $9.55 U.S. while Centex shares ran up $1.42 to $9.04 U.S. The deal gave a boost to a number of other companies in the sector, including Lennar and Hovnanian Enterprises.
Aluminum-maker Alcoa essentially began the corporate reporting period Tuesday night. The Dow component reported a first-quarter loss of 59 cents U.S. per share, versus a profit of 44 cents U.S. a year ago.
Economists surveyed by Briefing.com were expecting a loss of 56 cents U.S. per share. The company also reported weaker quarterly revenue that was slightly better than forecast. Shares inched higher Wednesday afternoon.
Shares in life insurers, which have been hard hit by investment losses this past year, gained ground after the Wall Street Journal said that the U.S. government may soon provide rescue funds to the ailing sector. An announcement could come within the next few days, the Journal said.
In New York, Prudential Financial Corp. gained $1.16 to $23.26 U.S. Other gainers included Hartford Financial, Genworth Financial and Lincoln National.
Bed Bath & Beyond reported weaker quarterly earnings that beat forecasts on lower revenue that met estimates. Shares jumped 23%
On the economic front, the release of the minutes from the latest Fed meeting last month showed the central bank viewed downside risks as the biggest worry in the near term.
Faced with the danger of a worsening recession, Federal Reserve policy-makers decided to plough $1.2 trillion U.S. into the economy to drive down interest rates.
Projections for economic activity in the second half of 2009 and in 2010 "were revised down" by the Fed's staff, according to the minutes. It did not provide updated forecasts.
Also, February wholesale inventories fell 1.5% versus forecasts for a drop of 0.7%. Inventories fell 0.7% in the previous month.
Treasury prices rallied, lowering the yield on the benchmark 10-year note to 2.88% from 2.91% Tuesday. Treasury prices and yields move in opposite directions.
U.S. light crude oil for May delivery settled up 23 cents at $49.38 U.S. a barrel on the New York Mercantile Exchange. Prices slipped in the morning, but managed to turn around after the government's weekly report showed crude supplies increased less than expected.
COMEX gold for June delivery rose $3.40 to settle at $885.90 U.S. an ounce.
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