The Toronto stock market was slightly lower Tuesday as traders coped with more uncertainty over whether a new Italian government will follow through on crucial financial reforms to deal with that country’s huge debt.
The S&P/TSX composite index was down 24.75 points to approach noon at 12,626.12
The Canadian dollar was off 0.22 at 97.26 cents U.S.
The TSX found some support from the financial sector after Bank of Montreal delivered surprisingly strong revenue and a first-quarter profit that remained above $1 billion, beating analyst estimates.
Analysts had estimated BMO would have about $958 million in adjusted profit, the equivalent of $1.48 per share. Instead, the bank beat that by four cents per share with $1.041 billion of adjusted net income, up $69 million or 7% from a year earlier. Its shares gained 69 cents to $63.62.
In the gold sector, Goldcorp Inc. rose 71 cents to $34.35.
Utilities were also positive as Algonquin Power & Utilities improved by eight cents to $7.62.
The metals and mining sector gained while March copper was up one cent at $3.55 U.S. a pound. First Quantum Minerals rose 16 cents to $18.67.
The energy sector fell as Suncor Energy slipped 47 cents to $30.90.
The information technology sector declined as CGI Group fell 35 cents to $26.60 while BlackBerry dropped 36 cents to $13.12.
In other earnings news, Maple Leaf Foods Inc. said net income attributable to common shareholders was $54.6 million or 38 cents per diluted share in the three months ended Dec. 31, up from $8.4 million or six cents per diluted share in the same 2011 quarter. Revenue fell slightly to $1.2 billion from $1.24 billion and its shares were up three cents to $13.21.
The initial results of the Italian election showed voters were fed up with the austerity measures enacted by the previous technocratic government led by Mario Monti, who was brought in to deal with the country’s huge debt levels.
But voter anger against the Monti government was channeled through several outlets. The centre-left coalition led by Pier Luigi Bersani appears to have won a narrow victory in the lower house of parliament while the Senate looks split with no party in control.
ON BAYSTREET
The TSX Venture Exchange faded 7.87 points to 1,133.13
All but four of the 14 Toronto subgroups had faded into the red by noon, with information technology the main culprit, off 1.8%. Energy ran 1.1% lower, and health-care was 1% more sickly.
The four gainers were led by gold, up 1.8%, materials, ahead 1%, and telecoms, inching up 0.1%.
ON WALLSTREET
An early morning market rally on the heels of positive economic data and corporate earnings gained some momentum immediately after Federal Reserve boss Ben Bernanke started speaking.
The Dow Jones Industrial Average leaped 74.18 points to break for lunch at 13,858.30
The S&P 500 index eked up 0.38 points to 1,488.23. The tech-heavy NASDAQ Composite decreased 6.79 points to 3,109.46.
The Dow had jumped 125 points as Bernanke explained why the Fed's bond buying program and low interest rates should continue. "Economic activity in the United States has continued to expand at a moderate if somewhat uneven pace."
Still, as Bernanke discussed the "uneven recovery," investors were squarely focused on the latest signs of a housing rebound.
Home improvement retailer Home Depot reported strong year-end results, providing more evidence of a housing rebound. The company reported a 7% gain in same-store sales for the fourth quarter.
In corporate news, department store chain Macy's reported net sales jumped in the fourth quarter, to $9.4 billion U.S. from a year earlier. The company also said that same-store sales rose 3.7% for the year, edging out its initial forecast of a 3.5% gain.
An Italian election that failed to produce a clear winner whipsawed U.S. stocks Monday, with the Dow and S&P 500 suffering their biggest one-day declines of the year.
Election results released by the Italian government late Monday showed a narrow victory for the centre-left coalition headed by Pier Luigi Bersani in the lower house of parliament.
But former Prime Minister Silvio Berlusconi and other anti-austerity parties were not far behind, and the results pointed to gridlock in the Italian Senate. According to Bloomberg, Berlusconi is weighing an alliance that could break the gridlock.
Economically speaking, the S&P Case-Shiller home price index for the fourth quarter of 2012 showed that home prices jumped 7.3%, the third straight quarter of year-over-year gains in prices.
Consumer confidence increased in February. The Conference Board's index showed that confidence jumped to 69.0 from 58.6 in January.
Prices on the 10-year U.S. Treasury picked up more ground, dropping yields to 1.85% from Monday’s 1.90%. Treasury prices and yields move in opposite directions.
Oil prices slid 79 cents to $92.32 U.S. a barrel.
Gold prices gained $24.80 to $1,611.70 U.S. an ounce.
