Weakness in financial stocks kept gains on the Toronto stock market subdued Friday after Royal Bank turned in a quarterly loss.
The S&P/TSX Composite Index staged a late rally to gain 23.17 points on the day to 10.415.54, after spending much of Friday in negative territory. Even so, the index vaulted to highs it hasn’t seen since last fall.
It was the latest strong showing in a spring rally that started March 10, which has taken the TSX up over 37%.
The financial sector was down after Royal Bank the last of the big Canadian banks to report, reported a $50-million second-quarter loss, down from a $928-million profit a year ago.
Excluding one-time items, cash earnings per share beat analyst estimates by six cents but its shares fell $1.50 to $44.00.
Elsewhere in the sector, CIBC shed two cents to $54.45, following a loss of almost five per cent Thursday in the wake of a poorly-received earnings report.
The TSX energy sector lost most of earlier momentum, as Suncor Inc. lost 17 cents to $38.59 and Canadian Oil Sands Trust climbed 34 cents to $28.13.
The base metals sector was ahead as Teck Resources rose 56 cents to $17.21.
General Motors Corp., the German government and Canadian auto parts maker Magna International have agreed on the framework of a deal for Magna to take a majority stake in GM's Opel unit, a person briefed on the negotiations said today. Magna shares were down 68 cents to $35.48.
The Canadian dollar leaped 1.97 cents to finish the week at 91.66 cents U.S.
ON BAYSTREET
Of the 13 TSX subgroups, gainers edged losers seven to six. Metals and mining stocks were up 2.2% on the day, followed by health-care stocks, up 1.8% and utilities, ahead 1%.
The worst off of the laggards were information technology stocks, down 1.5%, consumer discretionaries, off 0.9% and real-estate stocks, sliding 0.7%.
The TSX Venture Exchange was up 18.92 points at 1,122.60 while the Nasdaq Canada Index backpedaled 8.62 points to 756.64.
ON WALLSTREET
The Dow Jones Industrials average also staged a late rally to gain 96.77 points, to close a short week at 8,500.57.
The S&P 500 index jumped 12.32 points to 919.15, while the Nasdaq Composite Index recovered 22.54 points, to 1,774.33
The major indexes ended May and the holiday-shortened week firmly in positive territory, bringing the increase from the lows of early March to about 30%. But the market has been in a holding pattern recently as investors look for evidence that the economy has not only stabilized, but is poised to begin growing again.
Energy stocks, such as Exxon Mobil and Chevron, were both about 0.5% higher.
After the stock market closed Thursday, Dell reported a drop in sales and earnings. The company said a slowdown in PC sales pressured its bottom line.
Before the opening bell Friday, luxury retailer Tiffany & Co. reported first-quarter earnings of 20 cents U.S. per share, slightly lower than the 21-cent-per-share profit analysts had expected.
But the jewelry maker maintained its full-year earnings forecast.
Activist investor William Ackman's quest to overhaul the board of Target fell flat at the retailer's annual shareholder meeting. None of Ackman's candidates for the board won a seat.
Shares of General Motors fell below $1 for the first time since the Great Depression as the troubled automaker appeared set to enter bankruptcy early next week.
The government said first-quarter gross domestic product fell at an annual rate of 5.7%. This is close to expectations of a 5.5% annual rate drop in the first quarter, according to a consensus forecast from Briefing.com. The initial reading last month put the annual rate of decline at 6.1%.
A measure of business activity in the Midwest fell in May at a much sharper rate than expected, according to the Institute for Supply Management.
The ISM's Chicago Purchasing Managers Index dropped to 34.9 in May from 40.1 in April. Economists had expected it to rise to 42.
Treasury prices rose, with the yield on the benchmark 10-year note slipping to 3.5% from 3.67% Thursday. Bond prices and yields move in opposite directions.
The yield on the 10-year note jumped to a 6-month high of 3.71% earlier this week, raising fears that higher borrowing costs, particularly mortgage rates, could hinder an economic recovery.
NYMEX oil for July delivery rose 73 cents to $65.81 U.S. a barrel after climbing to a high of $66.47 earlier in the session. The price of oil has nearly doubled from the lows of mid February on a weaker dollar and bets energy demand will pick up as the economy recovers.
COMEX gold for August delivery was up $17.10 an ounce to $980.30 U.S.
