Canadian stocks bounced back Thursday on strength in banks and miners, while mixed U.S. economic data showed the jobs market improving but consumers’ spending and manufacturing activity below expectations.
The S&P TSX Composite Index gained 79.45 points to close Thursday at 12,723.46.
The Canadian dollar was up 0.40 cents at 101.43 U.S. cents
The S&P/TSX Capped Financial Index rose, boosted by solid earnings results and dividends hikes from some of Canada’s largest banks.
Royal Bank of Canada shares climbed $1.12, or 2%, to $56.80 after the bank raised its quarterly dividend by about 6% to 57 cents a share. Canada’s largest bank also said revenue for the first quarter ended Jan. 31 rose as net profit slipped to $1.86 billion from $1.95 billion.
Toronto-Dominion Bank also rose, up $1.22, or 1.5%, to $82.05. The number-two Canadian bank by assets boosted its quarterly dividend by 6% to 72 cents a share, as first-quarter earnings came in slightly lower than in the year-earlier period.
Equities in the mining sector recovered from a tumble on Wednesday. The S&P/TSX Capped Material Index was up after gold futures traded higher and an index tracking manufacturing in China, the world’s biggest copper consumer, rose for a third straight month.
Shares of Goldcorp Inc. rose 98 cents, or 2%, to $48.95 and Ivanhoe Mines increased 89 cents, or 5.2%, to $18.06.
Among the bigger losers, transportation firm Bombardier Inc. shares fell 49 cents, or 10.3%, to $4.26 on a 27% decline in fourth-quarter earnings.
Also lower, Research In Motion Ltd. shed 68 cents, or 4.9%, to $13.35, after a Jefferies & Co. analyst lowered his price target on forecasts of poor fourth-quarter earnings, which will be reported March 29, and predicted lower sales in the following quarter.
Economically speaking, Statistics Canada reported this morning that its Industrial Product Price Index rose 0.3% in January, led by petroleum products and primary metals. The agency’s Raw Materials Price Index edged up the same month by 0.1%, mostly due to higher wood and metal prices.
ON BAYSTREET
The TSX Venture Exchange gained 16.77 points to 1,688.30, while the Nasdaq Canada index faded 0.15 points to 421.22
All but two of the 14 Toronto subgroups were positive on the day, with metals and mining and financials surging 1.1% each, and health-care issues tacking on 1%.
The two laggards were information technology, off 1%, and consumer staples, 0.4% less robust.
ON WALLSTREET
In New York, stocks rose Thursday as investors welcomed mostly positive economic news and digested testimony from Federal Reserve chairman Ben Bernanke.
The Dow Jones Industrials gained 28.23 points to conclude the session at 12,980.30.
The S&P 500 added 8.38 points to 1,374.06, while the Nasdaq gained 22.08 points to 2,988.97
The financial sector led the advance, with Bank of America, JPMorgan and American Express among the top performers.
Stocks opened higher following upbeat reports on initial jobless claims and personal income and spending. But the market pared gains after an index of U.S. manufacturing activity came in weaker than expected.
General Motors. Ford Motor and Chrysler Group reported a big jump in February sales.
Analysts and industry executives said it looks like the annual pace of U.S. sales should come in at or near 15 million vehicles when adjusted for seasonal factors. That would be a big jump from the 14.1 million annual sales rate in January and the best pace of sales since March 2008.
Meanwhile, retailers reported February same-store sales growth that beat analysts' expectations, according to preliminary estimates from Thomson Reuters.
Same-store sales for most of the companies Reuters tracks rose 4.7% in February, compared with a forecasted 3.4% rise.
Gap shares jumped after the retailer said sales rose 6% in February.
Shares of Wal-Mart gained ground, after the company raised its annual dividend 9% to $1.59 U.S. per share.
Shares of Wendy's edged up after the fast food chain beat earnings estimates by a penny. The company also topped sales estimates.
Grocery chain Kroger's stock was also higher thanks to better-than-expected fourth-quarter results.
The Institute for Supply Management’s manufacturing index was "quite disappointing," according to one expert. But the index still signaled expansion in the sector and other economic indicators Thursday were "consistent with better economic growth," he added.
Investors are also digesting indications that China's economy is improving. China's official purchasing managers' index rose to 51 in February from 50.5 the prior month, suggesting that the manufacturing sector is expanding -- albeit slowly.
A separate PMI report from banking company HSBC also showed manufacturing activity edged up last month. But the index reading of 49.6 was just below the 50 threshold for expansion in the sector.
Meanwhile, worries about the European debt crisis continue to loom in the background. European leaders will gather in Brussels on Thursday for a two-day summit to determine the size of their financial firewall, and to discuss the details of a pact on fiscal discipline.
Euro-area officials tentatively approved a second €130-billion bailout for Greece last week, and the European Central Bank announced Wednesday that it loaned €529.5 billion to European banks through a second long-term refinancing operation.
On the economic front, the ISM’s manufacturing index fell 1.7 points to 52.4 in February. The index, based on a survey of purchasing managers, was expected to have risen to 54.7. Any reading above 50 signals expansion.
Separately, construction spending fell 1% in January, according to the U.S. Census Bureau.
What’s more, initial jobless claims for the week ended Feb. 25 fell 2,000 to 351,000 -- coming in below expectations.
Personal income rose 0.3% in January, while spending edged up 0.2%. Economists were expecting income and spending to have increased by 0.4% each.
Treasury prices for the 10-year note fell, boosting yields to 2.04% from Wednesday’s 1.98%. Treasury prices and yields move in opposite directions.
Oil for February delivery gained $2.84 to $109.91 U.S. a barrel.
Gold futures for April delivery rose $10.70 to $1,722 U.S. an ounce.
