The Toronto stock market eked out a small gain Thursday afternoon as investor nervousness about the pace of economic recovery countered a batch of upbeat earnings from key resource companies.
The S&P TSX Composite Index ended the day up 32.01 points, after something of a seesaw session, to 11,728.64
Suncor Energy Inc., Barrick Gold Corp., Goldcorp Inc., and Potash Corp. of Saskatchewan Inc. all reported big jumps in second-quarter income and revenue.
However, investors were hesitant to jump into the market with both feet in advance of reports on Canadian and U.S. GDP data, due out Friday, and next week’s employment numbers for both countries for the month of July.
Barrick Gold, the world’s largest gold producer, raised its dividend 20% as it reported a record second-quarter profit of $783 million U.S., up 59% from a year ago. Shares in Barrick gained 43 cents to $42.05.
And Goldcorp reported a second-quarter profit of $826.7 million U.S., boosted by the sale of its Escobal silver deposit in Guatemala. This compared with a loss of $232.4 million in the same period last year. Shares of the company slipped 22 cents to $40.23.
The financial sector added some muscle on the strength of insurance stocks, which jumped after reports that upcoming changes to capital rules for life insurers will only apply to products sold in the future. Shares in Manulife Financial jumped 73 cents or 4.7% to $16.43.
The base metals sector gained traction as the September copper contract climbed 4.45 cents to $3.29 U.S. a pound. Shares in HudBay Minerals Inc., however, fell 13 cents, or 1%, to $12.74.
Thursday was a busy day for Canadian companies reporting second-quarter results.
Potash Corp. of Saskatchewan said it earned $472 million, more than double its year-ago profit, and the second-highest second-quarter total in the company’s history. It also raised its profit outlook for the year. Shares in Potash Corp. gained $4.91 or 4.8% to $106.61.
Agnico-Eagle Mines Ltd. said its quarterly profit soared to $100.4 million U.S. from $1.2 million a year earlier as the gold miner had all six of its mines in production. Shares in the company were down 16 cents to $57.11.
Cenovus Energy Inc., the integrated oil company spun off last year by Encana Corp., said it earned $172 million in the second quarter, up 7.5%, but its operating earnings missed analysts’ expectations. Shares in Cenovus lost $1.36 or 4.5% to $28.61.
Transportation company TransForce Inc. said its net income fell by 5% to $17 million while revenue gained 9% compared with last year. Shares in the company lifted 73 cents or 7.8% to $10.06.
Information services provider Thomson Reuters Corp. said profit dropped 8% to $290 million U.S. while revenue slipped 2%. Shares in Thomson Reuters lost 79 cents to $38.91.
And forest products company Tembec Inc. reversed a year-ago loss, earning $59 million as sales increased nearly 35%. The company’s stock price added three cents to $2.17.
In economic news, Statistics Canada said the Industrial Product Price index fell 0.9% in June, led by petroleum and metals. Meanwhile, the Raw Material Price Index eased 0.3%, mainly due to lower prices of non-ferrous metals.
The Canadian dollar sneaked up 0.11 cents to 96.47 cents U.S.
ON BAYSTREET
Of the 14 TSX subgroups, eight ended lower. Health-care issues fell 1.1%, while consumer staples slid 0.5% and telecoms were down 0.3%.
The half-dozen gainers were led by materials, ahead 1%, utilities, gaining 0.8% and financials, prospering 0.6%.
The TSX Venture Exchange remained up 11.66 points to 1,422.28 while the Nasdaq Canada index inched ahead 1.74 points at 641.11.
ON WALLSTREET
In New York, stocks erased losses, stabilizing near the end of a jittery session in which worries about the economy and some end-of-the month machinations caused a selloff.
Still, by the closing bell, the Dow Jones industrial average had given back 30.72 points to 10,467.16
The S&P 500 index had fallen 4.60 points to 1,101.53. The tech-rich Nasdaq composite index had shed 12.87 points to 2,251.69.
Upbeat earnings from Exxon Mobil and a report showing a drop in weekly jobless claims helped boost stocks in early trading. But the tone turned negative by mid-morning, extending the market's recent bout of weakness at the end of a strong month.
Stocks had fallen on worries about Friday's GDP report and after Fed Governor James Bullard warned about the threat of deflation to the economy. But the selling gave out by the last hour of the session.
Low summer trading volume was exacerbating the market moves.
Federal Reserve Bank of St. Louis President James Bullard warned that the Fed's current policies were putting the U.S. at risk of falling into an extended period of falling wages and prices.
The news was noteworthy as Bullard, a voting member of the Fed's policy committee, has previously been an inflation hawk, more focused on the threat of higher prices and costs.
Stocks slipped Wednesday after a worse-than-expected report on durable goods orders and weaker quarterly results from Boeing and others sparked some worries about the recovery.
Meanwhile investors are also keeping an eye on Friday's GDP report which is expected to show second-quarter growth revised to a 2.5% annualized rate, down from the 2.7% annualized rate reported.
Dow component Exxon Mobil reported higher quarterly earnings and revenue thanks to an increase in oil prices versus a year ago. Earnings results topped estimates, but analysts surveyed by Thomson Reuters expected higher year-over-year revenue growth. Shares fell 1%.
Colgate-Palmolive tumbled 7% after the maker of toothpaste and pet food products reported second-quarter sales that were shy of forecasts. The company said weaker consumer spending accounted for slower sales, as well as the impact of devaluation of the Venezuelan currency. Colgate cut its full-year profit outlook.
A number of consumer stocks tumbled as well, including Dow components Procter & Gamble and Kraft Foods
On the upside, consumer products maker Avon Products reported higher quarterly revenue and earnings that topped expectations. The company said increased sales of beauty products and strength in its Latin American market helped to offset weakness on home products and the impact of currency fluctuations. Shares gained 1%
Trading in Cisco Systems was briefly halted in the late morning after it triggered a circuit breaker by jumping at least 10% in a five-minute period. NYSE Amex, where the trade occurred has said it will stand, following examination, according to published reports.
Circuit breakers were instituted in the wake of the May 6 "flash crash" in which the Dow lost nearly 1,000 points in a matter of minutes before recovering due to faulty trades.
Amazon released the Kindle 3 Wednesday, the newest version of its e-reader. Due to the ongoing e-reader price war, the company also released a cheaper model that sells for $139 U.S. Shares fell modestly Thursday.
Economically speaking, the Department of Labor said the number of Americans filing claims for first-time unemployment benefits fell 11,000 last week, to 457,000. Economists surveyed by Briefing.com had expected claims to have held steady at 464,000.
Continuing claims, a measure of Americans who have been receiving benefits for a week or more, jumped by 81,000 to 4,565,000, while economists had forecast a rise to 4,550,000.
Treasury prices lost ground, raising yields on the 10-year note back to Wednesday’s 3%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil was up $1.28 to $78.27 U.S.
Gold prices regained nine dollars to $1,171 U.S. an ounce.
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