Canadian stocks closed notably higher on Friday as traders prepare for a three-day holiday weekend. Resource stocks continued to lead the gainers in Toronto.
The S&P/TSX Composite Index sprinted ahead 113.24 points, or 1.06% to finish the day, week and month at 10,789.96, a boost of about 123 points on the week.
Gold and materials stocks both added strength as gold surged on the Comex. Eldorado Gold jumped 5.3% to $10.77 after the company reported second-quarter earnings of $0.07 U.S. per share, unchanged from the year-ago quarter.
In other corporate news, Quadra Mining Ltd. added 0.9% to $10.59 after Credit Suisse initiated coverage of the stock with a Neutral rating and a price target of $12.
Pengrowth Energy dropped 0.2% to $8.83 after the stock was initiated at Hold by Canaccord Adams.
Sierra Wireless declined 2.9% to $7.75 after the company reported second quarter net loss of $5.87 million U.S. or $0.19 U.S. per share, compared to net income of $10.97 million U.S. or $0.35 U.S. per share in the same quarter of last year. Analysts expected the company to report earnings of $0.26 U.S. per share.
Norbord gained 5.1% to $1.04 after the company reported a second-quarter net loss of $18 million U.S. or $0.04 U.S. per share compared to a loss of $36 million U.S. or $0.24 U.S. per share in the second quarter of 2008.
MethylGene dropped 5.7% to 25 cents after the company reported second-quarter net loss of $6.92 million or $0.19 per share, compared to net loss of $7.4 million or $0.20 per share last year.
TVA Group surged 15% to $10.35 after the company posted second-quarter net income of $15.2 million or $0.63 per share, compared to $12.9 million or $0.49 per share in the last-year quarter.
On the economic front, Statistics Canada reported that the Canadian Gross Domestic Product decreased 0.5% In May. GDP was expected to fall 0.4%, compared to a 0.1% drop in April.
The Canadian dollar grew 0.57 cents to 92.85 cents U.S.
ON BAYSTREET
Of the 14 TSX subgroups, all but two were in the black. Metals and mining stocks remained the champion, up 3.4%, albeit only a hint ahead of gold, while global base metals gained 2.3%.
Health-care stocks lost 1.4% and telecoms were off 0.2%.
The TSX Venture Exchange sprinted ahead 32.53 points, to 1,179.57, while the Nasdaq Canada Index poked ahead 2.37 points to 745.87.
ON WALLSTREET
In New York, the stock advance lost steam late Friday, at the end of Wall Street's best July in decades, as investors considered a report that showed the pace of the recession is easing.
The Dow Jones Industrials finished 17.15 points ahead on the day to 9,171.61. The S&P 500 index gained 0.73 points to 987.48. The tech-rich Nasdaq composite backpedaled 5.80 points, to 1,978.50.
For the month of July, the Dow gained around 8.8%, according to early tallies, seeing its best July since 1989, when it gained 9%. The S&P 500 is up 7.5% this month, seeing its best July performance since 1988, when it gained 8.8%.
Despite Friday’s loss, the Nasdaq was up 8% in the month, its best July since 1997, when it gained 10.5%.
Dow component Chevron reported a 71% drop in second-quarter profit due to oil and gas prices and lower demand for fuel in a global economic slowdown. The number-three oil producer said it earned 87 cents U.S. per share versus $2.69 U.S. a year earlier. Economists surveyed by Thomson Reuters thought it would earn 97 cents U.S. per share. Shares gained 2%.
On Thursday, number-one oil producer Exxon Mobil, also a Dow component, reported a 66% drop in quarterly profit. Shares of Exxon dipped Friday.
Late Thursday, Walt Disney reported weaker earnings that topped estimates on weaker revenue that missed estimates. Shares of the Dow component slipped nearly 4% Friday.
Also late Thursday, Las Vegas Sands reported a wider quarterly loss as the recession cut into profits at its casinos and hotels. The company reported weaker quarterly earnings that topped estimates and weaker revenue that missed estimates. On Friday, a number of analysts downgraded the company or warned about its capital position. Shares slumped 16% in unusually active New York Stock Exchange trading.
Ford Motor shares rallied, with economists estimating that the “Cash for Clunkers” program will help boost auto sales (see below).
Economically speaking, the nation's gross domestic product, the broadest measure of U.S. economic activity, fell at a smaller-than-expected annual rate from April to June.
The government said GDP shrank 1% in the second quarter. Economists were expecting the report to show a 1.5% decline in the period.
While the reading was better than expected, it was the fourth quarter in a row of declining GDP. The first-quarter reading was revised lower to a decline of 6.4%.
The most recent quarter is the first in which President Obama was fully in charge of the economy. Investors will be looking to see what impact stimulus spending and tax cuts, which kicked in during the quarter, had on the economy.
GDP has declined for four quarters in a row, hitting the nadir in the first quarter, which was revised lower to a decline of 6.4% from the originally reported decline of 5.5%.
In other economic news, the House of Representatives voted to add $2 billion U.S. to the popular cash-for-clunkers program, which has been running low on funds. The Senate will vote on the bill Monday. The program is seen as having already started to help lift auto sales.
The Chicago PMI, a regional read on manufacturing, rose to 43.4 in July from 39.9 in June. Economists surveyed by Briefing.com thought it would rise to 43.
Treasury prices rose, corresponding lowering the yield on the benchmark 10-year note to 3.5%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil gained 97 cents to $68.03 U.S.
Gold prices were up $19 to $956 U.S. an ounce.
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