The Toronto stock market moved slightly higher Thursday morning as commodity prices fell, both oil and gold losing ground as the spectre of Greece defaulting on its debt raised doubts about the stability of European economic recovery.
The S&P/TSX Composite Index recovered from 100 points in the hole during morning trading to finish the day ahead 2.63 points to 12,113.53.
Greek borrowing costs spiked to a record high on Thursday. The spread between Greek and German 10-year bond yields widened to 4.48 percentage points earlier, its highest level since the euro was introduced in 1999. The higher the spread, the less confidence markets are showing in Greece’s ability to pay.
Greek shares took another battering -- the benchmark ASE composite index was down around 5%.
The new round of worry comes barely two weeks after the EU finally agreed to a backstop bailout mechanism for the debt-laden country that would also involve the International Monetary Fund.
There are concerns that debt problems in Greece and other European nations could upend a global economic recovery and damage the euro.
The U.S. dollar rose against the euro and other major currencies, including the Canadian dollar.
The TSX energy sector was higher as Suncor Energy tacked on 74 cents to $35.33
In the gold sector, Eldorado Gold added 13 cents to $13.80.
Centerra Gold shares were down 64 cents to $11.35 after it said Wednesday its flagship Kumtor gold mine in Kyrgyzstan had so far been unaffected by the violence that led to the overthrow of the government in the small impoverished Central Asian nation. An opposition coalition proclaimed a new interim government Thursday.
The base metals sector lost ground while the May copper contract in New York was off five cents to $3.55 U.S. a pound. Teck Resources was down 18 cents to $45.22.
An early major decliner was Shoppers Drug Mart. Its shares fell $4.25 or 9.8% to $38.92 after it said it would have to restructure dramatically under a plan by the Ontario government to cut the price of generic medications to 25% of the equivalent brand-name drug, from 50%.
In other corporate news, the Cogeco Inc. cable and media business reported a $10.5-million profit for its most recent quarter, rebounding from the $115.2-million loss from a year earlier.
Cogeco’s revenue rose by 5.5% to $329.1 million in the three months ended Feb. 28, the second quarter of the Montreal-based company’s 2010 financial year. The profit amounted to 63 cents per share, compared with a loss of $6.88 per diluted share a year earlier and its shares fell 52 cents to $31.99.
Astral Media Inc. shares lost 96 cents to $35.51 after it said its second-quarter profit was $33.6 million, up 24% from $27.1 million a year earlier. The radio, specialty TV and billboard company said that revenues rose 4% overall to $218.3 million, led by a 23% surge in revenue from outdoor advertising. The net income amounted to 59 cents per share, up from 48 cents a share a year earlier.
The Canadian dollar picked up 0.13 cents to 99.70 cents U.S.
ON BAYSTREET
Eight of the 14 TSX subgroups were lower, weighed mostly by consumer staples, off 2.6%, information technology, down 1.4%, and real-estate issues, which slid 0.8%.
The five gainers were led by global base metals, ahead 0.7%, energy stocks, jumping 0.6%, and industrials, gaining 0.4%. The financial sector was flat.
The TSX Venture Exchange gave back 5.68 points to 1,652.86, while the Nasdaq Canada index slid 1.50 points to 776.64.
ON WALLSTREET
In New York, stocks gained Thursday as upbeat sales reports from the nation's retailers helped provide optimism about the economic outlook, taking the edge off worries about Greece and other euro zone debt issues.
The Dow Jones industrial average recovered 29.55 points to end the day at 10,927.07. The S&P 500 picked up 3.99 points to 1,186.44. The Nasdaq gained 5.81 points to 2,436.81.
Stocks fell in the morning, but managed to erase those losses and edge higher in the afternoon, led by financial shares including American Express JPMorgan Chase and Goldman Sachs. Retail shares gained as well.
Stocks slipped Wednesday after General Motors' huge loss, but the market was also vulnerable after finishing at an 18-month high on Wednesday.
The Dow, Nasdaq and S&P 500 have now risen in six of the last seven weeks as investors have bet that continued low interest rates, some stability in the job market and a pickup in the economy will help sustain a stock advance.
As of Thursday afternoon, the Dow is flat for the week, the Nasdaq and the S&P are both up.
A number of chain stores reported strong March sales thanks in part to the early Easter and signs of improvement in the job market.
Sales at stores open a year or more, a retail metric known as same-store sales, rose 9.1% in March versus a year ago, according to Thomson Reuters. It was the biggest monthly gain since Thomson began keeping records in 2000 and surpassed the company's forecast for a gain of 6.3%.
Among the standouts, women's apparel retailer The Limited said sales rose 15% at stores open a year or more versus forecasts for a rise of 6.8%.
Discounter TJX said sales at stores open a year or more rose 12% in the month. As a result, the retailer raised its current quarter profit outlook.
But some companies warned that a strong March will chip away at April sales. Kohl's said its strong 22.5% jump in March will be followed by a decline in April.
UAL's United Airlines and US Airways are reportedly talking a merger again, according to several published reports. The two companies have discussed teaming up previously in the last decade.
UAL shares gained 7% and US Airways shares gained 12%. Other airlines rose as well.
Economically speaking, there were 460,000 initial jobless claims filed in the week ended April 3, up 18,000 from an upwardly revised 442,000 the previous week, according to the Labor Department's weekly report.
Economists surveyed by Briefing.com had expected 442,000 claims. The number of new claims was just below the level reached in the Feb. 27 week, when initial claims totaled 466,000.
U.S. Treasurys fell, raising the yield on the benchmark 10-year note to 3.90% from Wednesday’s 3.96%. Bond prices and yields move in opposite directions.
The price of a barrel of oil lagged yesterday’s close by 33 cents to $85.55 U.S.
Gold prices slipped two dollars to $1,151 U.S. an ounce.
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