Positive earnings news helped support the Toronto stock market Tuesday but traders were cautious amid higher borrowing costs for Spain and an unsettling downgrade by Moody’s Investor Services.
The S&P/TSX Composite index fell below breakeven by 5.18 points to approach noon at 11,540.36
The Canadian dollar weakened 0.15 cents to 98.06 cents U.S.
Rogers Communications Inc. reported net income declined 2.4% to $400 million, or 75 cents per share. But adjusted earnings of $478 million, or 91 cents per share beat estimates by five cents.
Revenue was $3.11 billion, up slightly from $3.1 billion in the comparable period, but below expectations of $3.14 billion.
But its shares jumped $2.08 to $39.32. Elsewhere in the sector, BCE Inc. gained 37 cents to $41.67.
Industrials were also positive with Canadian National Railways ahead $1.15 to $87.99.
Commodities were mixed Tuesday after demand worries and a rising American currency impacted prices for oil and metals on Monday.
In the gold sector, Goldcorp Inc. edged up 21 cents to $33.68.
The energy sector was off while Canadian Natural Resources lost 25 cents to $28.53.
Husky Energy Inc. says weaker commodity prices helped pull second-quarter net earnings down to $431 million, or 43 cents per share, from $591 million, or 60 cents per share, a year ago. Its shares gained three cents to $25.15.
The base metals sector slipped with copper prices off a penny at $3.37 U.S. a pound after falling seven cents on Monday.
Teck Resources declined 30 cents to $29.50 while First Quantum Minerals gained 11 cents to $17.34.
The financial sector was also a drag with Royal Bank down 29 cents to $51.23.
On the economic slate, Statistics Canada reported this morning that Retail sales rose less than expected in May, up 0.3%, compared to expectations for a 0.5% rise. Excluding autos, sales rose a firmer-than-expected 0.5% (the consensus being 0.1%).
ON BAYSTREET
The TSX Venture Exchange fell 2.52 points to 1,171.64. The Nasdaq Canada index recovered 1.05 points to 332.65.
In all, eight of the 14 Toronto subgroups were negative by the midpoint, weighed mostly by global base metals, off 0.8%, while energy and financial issues each slid 0.4%.
The half-dozen gainers were led by telecoms, up 1.5%, while gold soared 0.8%, and materials took on 0.4%.
ON WALLSTREET
U.S. stocks were slightly lower Tuesday as ongoing worries about Europe kept investors on edge. But the losses were modest thanks to a report showing an improvement in Chinese manufacturing.
The Dow Jones industrial average declined 115.3 points to break for lunch at 12,606.16
The S&P 500 retreated 11 points to 1,339.52. The Nasdaq docked 14.42 points to 2,875.73.
In the United States, investors have a host of quarterly earnings to mull over.
DuPont shares edged lower after the chemical maker's revenue fell short of expectations, and said it expects full-year earnings to be toward the lower end of its outlook.
AT&T shares rose after the mobile provider delivered higher earnings and revenue thanks to strong subscriber growth during the quarter.
UPS shares fell after the shipping company reported earnings and sales that fell short of forecasts, and cut its outlook. The company blamed uncertainty in the United States, Europe's debt crisis and weak Asian exports.
Apple and Netflix are on tap to report after the close.
Cisco was the biggest laggard on the Dow, with shares down more than 4%. Late Monday, Cisco said it will cut 1,300 jobs, or about 2% of the company's global workforce.
DeVry's stock tumbled 29%, making it the worst performer on the S&P 500, after the for-profit education provider warned that it would earn far less than what analysts had been expecting in the fourth quarter, citing a shortfall in revenue, rising costs and a one-time charge.
Rival Apollo Group, which operates the University of Phoenix, was also a big loser. JPMorgan lowered its stock price target on the company to $43 from $47 U.S.
Early Tuesday, HSBC said its China Manufacturing Purchasing Managers' Index came in at 49.5 for July. While any reading below 50 indicates contraction, it is the highest number reported since February and shows significant improvement.
Rating agency Moody's cut the outlook on Germany's prized Aaa credit rating to "negative" after the closing bell Monday, citing concerns about the stability of the euro-zone and the potential for more bailouts.
Moody's also revised its outlooks on the Aaa ratings of the Netherlands and Luxembourg to "negative." Finland is the only country in the 17-nation euro-zone to maintain its Aaa rating and a stable outlook.
Meanwhile, European manufacturing activity remains sluggish. Activity continued to contract across the euro-zone in July, while Germany's PMI fell to a three-year low.
Spain remains in the spotlight, with the yield on the 10-year bond hitting a fresh euro-era record high of 7.625%. That came as Spain successfully auctioned €3 billion of three-month and six-month government bills, but investors demanded higher interest rates amid ongoing fears that Spain could require a full-blown bailout.
Economically speaking, the Federal Housing Finance Agency's Housing Price Index for May was up 3.7% from a year earlier.
The news followed a similarly bullish report from real estate listing site Zillow, which showed home prices rose for the first time in five years.
The price on the benchmark 10-year U.S. Treasury strengthened, pushing the yield down to 1.42% from 1.44% late Monday. Treasury prices and yields move in opposite directions.
Oil for September delivery tacked on 24 cents to $88.38 U.S. a barrel.
Gold futures for August delivery fell $3.30 to $1,574.10 U.S. an ounce.
