A strong earnings report from CIBC helped push the Toronto stock market higher Wednesday while investors largely shrugged off data showing the Canadian economy hit the brakes in the second quarter.
The S&P/TSX Composite Index amassed 133.99 points worth of gains, or 1.1%, to finish at 12,768.70
The Canadian dollar ditched 0.09 of a cent to 102.14 cents U.S.
CIBC shares jumped $2.99 to $76.05 as it said its third-quarter profits grew by 26% to $808 million. Cash earnings came in at $1.91 a share, a dime above expectations.
Revenue of $2 billion was up 3% from the third quarter of 2010, primarily due to solid growth in personal banking. CIBC also said it would boost its quarterly dividend by three cents to 90 cents per share.
The CIBC report pushed the financials sector up as Scotiabank climbed $1.13 to $54.63 and Royal Bank was up $1.07 to $50.00.
The energy sector rose while Canadian Natural Resources ran ahead 64 cents to $37.00 and Imperial Oil advanced 78 cents to $40.16.
Copper prices gained six cents to $4.21 U.S. a pound, pushing the base metals sector up. First Quantum Minerals was up $1.50 to $24.09 while Quadra FNX Mining rose 41 cents to $12.98.
In the gold sector, Barrick Gold Corp. picked up nine cents to $49.85 and Goldcorp Inc. faded 14 cents to $51.00.
Elsewhere on the TSX, transportation giant Bombardier Inc. lost 35 cents to reach $4.77 as it reported second-quarter net income of $211 million U.S., compared with $138 million U.S. in same period last year. Bombardier said revenue during the quarter increased 17% to $4.7 billion U.S.
However, the manufacturer expects lower advances from aircraft orders for the year, mainly due to the postponement of orders in the regional aircraft market.
Paladin Energy Ltd., an Australia-based miner that lists on the TSX, cited higher financing costs Wednesday among reasons for a quarterly loss of $47.7 million U.S., up from a loss of $25.2 million U.S. a year ago. Revenue for the most recent period was $60.2 million U.S., up from $49.89 million U.S. and its shares lost nine cents to $2.16.
On the economic front, our economy shrank in 2011’s second quarter for the first time since this country was declared technically in a recession in the fall of 2008.
According to figures released this morning by Statistics Canada, Canadian gross domestic product shrank 0.1% in the three months ended June 30, or at an annualized pace — assuming it had contracted at that pace over a full year — of 0.4%.
The agency also revised its take on the first quarter down from an annual growth rate of 3.9% to 3.6%
Economists on average had expected no growth from the Canadian economy for the second quarter.
Exports of goods and services fell 2.1%, the first decline since the third quarter of 2010, as energy exports fell 6.7% due to wildfires in Alberta and maintenance shutdowns.
ON BAYSTREET
The TSX Venture Exchange advanced 8.11 points to 1,810.87, while the Nasdaq Canada index gained 4.10 points to 545.19
In Toronto, all but three of the 14 subgroups were higher. Metals and mining stocks grew 3%, utilities and financials were up 2% each.
The laggards were gold, off 0.3%, while materials and industrials each slipped 0.1%.
ON WALLSTREET
In New York, stocks lost momentum Wednesday afternoon after enjoying a strong rally earlier in the day. The seesaw ride was fitting on this last day of what has been an extremely volatile month for Wall Street. Investors today digested several economic reports on the labour market and manufacturing.
The Dow Jones Industrials improved 53.58 points on the day to 11,613.50
The S&P 500 picked up 5.97 points to 1,218.89, while the Nasdaq eked higher 3.35 points to 2,579.46
The Dow was led higher by shares of manufacturing heavyweights Caterpillar and Alcoa, both up more than 3%, following two strong reports on factory orders and the Chicago purchasing managers' index.
But shares of AT&T dropped more than 4.5% following news that the U.S. Justice Department had filed an antitrust suit to block the telecommunications giant's proposed buyout of T-Mobile.
Sprint shares jumped 7% on the news as well.
Investors battled through nauseating volatility throughout August, starting with the debt ceiling debate. However, most of this month's turmoil was spurred by Standard & Poor's downgrade of the U.S. credit rating on Aug. 5. That acted as the catalyst for two weeks of wild swings as investors feared the U.S. would tip back into a recession.
Shares of Exxon Mobil edged up 1% after the company announced late Tuesday that it has entered into a partnership with Russian oil giant Rosneft. The deal gives Exxon Mobil access to vast Arctic oil deposits and Rosneft a leg up in cutting-edge oil technology.
Bank of America shares rose 1% after The Wall Street Journal reported that the bank is looking to sell its correspondent mortgage business.
Shares of Oracle were up 2% despite another report in the Journal that said U.S. government authorities are investigating the software giant's business practices in Africa.
Economically speaking, the focus was on the labour market.
Challenger, Gray & Christmas said the number of planned job cuts fell 23% in August. Meanwhile, private-sector payrolls rose by 91,000 in August, according to payroll processor ADP. Economists were expecting the private sector to hire 100,000 new workers during the month, down from the 109,000 in the prior month.
The two reports come ahead of Friday's highly-anticipated August jobs report. A survey of economists forecasts that the U.S. economy added 80,000 jobs, and the unemployment rate remained at 9.1% in August.
The price on the benchmark 10-year U.S. Treasury note dipped, raising the yield to 2.22% from Tuesday’s 2.18%. Prices and yields move in opposite directions.
Oil for October delivery fell nine cents to $88.91 U.S. a barrel.
Gold futures for December delivery added $1.90 to $1,831.70 U.S. an ounce.
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