The Toronto stock market retained its strength throughout Wednesday’s session, on the backs of gold and energy stocks.
The S&P/TSX composite index tailed off its highs by the end of the day, but was still 123 points to the good, to finish at 10,223.94, as investors grow increasingly confident the spring rally, now into its third month, still has room to grow.
Sears Canada Inc. first-quarter profit was 85% lower than last year as the department store operator spent more on severance and saw revenue fall by 10.9%. Its shares fell 49 cents to $18.86.
The TSX energy sector was higher as prices got extra lift after data showed that U.S. crude inventories fell by a more than expected 2.1 million barrels last week. Analysts had expected a gain of 1.5 million barrels.
Suncor Inc. gained $1.18 to $36.26 and EnCana Corp. was up 65 cents to $62.26.
Among gold stocks, Barrick Gold Corp. advanced $2.20 to $41.53.
In the TSX financial sector, Manulife Financial Corp. rose 22 cents to $22.42 and Bank of Montreal climbed 39 cents to $43.18.
Canaccord Capital Inc. reported its fourth-quarter profit came in at $3.7 million, reversing a year-ago loss of $35.2 million. Revenue was down 25.4% to $107.0 million. Its full-year net loss was $47.7 million as revenue slid 34.7% to $477.7 million. Its shares advanced 85 cents to $8.10.
Canadian investors continue to digest the latest inflation numbers from Statistics Canada.
The agency said Wednesday overall prices fell in April as the country's annual inflation rate slumped to 0.4% from 1.2% in March.
The new rate is the lowest it has been since December 1994.
StatsCan said prices fell 0.1% from March to April, and 0.3% on a seasonally adjusted basis, resuming a trend that began last September.
Also, Canada’s index of leading economic indicators fell for an eighth month in April on declines in housing and manufacturing.
The economic index dropped 1.1% last month, Statistics Canada said. The housing index, a composite of housing starts and sales, fell 1.2%, while new manufacturing orders plunged 7.3%, the agency said.
The leading index compiles indicators from the money supply to the average length of the factory workweek to paint a picture of the economy in the months ahead. Eight of the 10 components fell, with the two financial indicators -- equity prices and the money supply -- recording gains.
Economists brought more good vibes with them Wednesday: Canada’s recession, likely its deepest since the Great Depression, may also be its shortest.
Rising home and car sales, unexpected gains in building permits and employment, easing credit conditions and higher commodity prices signal Canada’s slump may be nearing an end. Eight of 11 economists surveyed by Bloomberg this month predict the economy will return to growth next quarter.
Canada’s economy contracted at a 3.4% pace in the last quarter of 2008 and growth in the first quarter may shrink at a 7.3% rate, the Bank of Canada estimates.
The Canadian dollar continued its march upward, gaining 1.23 cents, to 87.65 cents U.S.
ON BAYSTREET
Of the 13 TSX subgroups, eight ended the day in positive territory. Gold sailed 4.3% higher, materials advanced 2.8% and energy stocks were up 2.1%
The five losing groups were weighed down by information technology stocks, off 1.6%, consumer discretionaries, down 1.1%, and consumer staples, moving 0.9% lower.
The TSX Venture Exchange picked up 9.15 points to 1,085.64 while the Nasdaq Canada Index took on 6.82 points to 723.37.
ON WALLSTREET
The Dow Jones Industrials average slumped 52.81 points to finish at 8,422.04
The S&P 500 index gave back 4.66 points to 903.47, while the Nasdaq Composite Index was down 6.70 points, to 1,727.84.
New York stocks finished lower Wednesday, erasing earlier gains, as the Federal Reserve's dour economic outlook outweighed optimism about the health of U.S. banks.
Retailer Target reported that first-quarter profit fell to 69 cents U.S. per share, a 7% decline from 75 cents a year earlier. The results topped analyst expectations of 60 cents U.S. per share, according to a consensus from Thomson Reuters. Target shares rose more than 2%.
Late Tuesday, PC maker Hewlett-Packard reported quarterly results that were in line with Wall Street's estimates. The company also said it would cut 6,400 jobs, or 2% of its workforce. HP shares fell 5%.
Bank of America said late Tuesday that in less than two weeks it had raised $13.47 billion U.S. through the sale of 1.25 billion shares.
That helped put the company more than halfway toward raising the money the U.S. government said was necessary based on a review of the bank's books. BofA, whose shares rose more than 2%, needs to raise $33.9 billion U.S. to meet the government's stress test requirements.
Treasury Secretary Tim Geithner told the Senate Banking Committee that stress-tested banks have set out to raise $56 billion U.S. to plug holes in their books.
Geithner also said there are "encouraging signs the financial system is starting to heal." But he warned that "we're only beginning to lay the foundation for economic recovery."
Also on the economic front, the minutes from its last policy meeting, show the Federal Reserve expects 2009 gross domestic product to shrink between 1.3% and 2%. That compares with January's projection for a decline between 0.5% and 1.3%.
The Fed's staff now expects the unemployment rate to rise to between 9.2% and 9.6%. In January, the jobless rate was forecast to rise to between 8.5% and 8.8%, but the unemployment rate topped that in April, hitting 8.9%.
But the Fed also pointed to signs the pace of the recession is easing.
Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.19% from 3.24% Tuesday. Treasury prices and yields move in opposite directions.
Crude prices rose to a six-month high, settling up $1.94 to $62.04 U.S. a barrel, after the government said U.S. supplies of crude oil and gasoline fell more than expected last week.
It was the first settlement above $60 U.S. for the active-month contract since Nov. 10; Wednesday was the first day that the July contract was the active month.
COMEX gold for June delivery rose $10.70 to settle at $937.40 U.S. an ounce.
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