North American stock markets registered solid gains Tuesday while resource stocks were boosted by the Chinese government’s assurances and traders were encouraged by generally positive U.S. data.
The S&P/TSX composite index was way off its highs for the day, but still finished positive by 28.63 points to 12,736.04
The Canadian dollar slipped 0.09 cents at 97.27 cents U.S., a day before the Bank of Canada makes its next announcement on interest rates. The bank could signal that interest rate hikes are even further down the road than thought because of persistent economic weakness.
Two of Canada’s biggest corporations were also in the spotlight after Scotiabank delivered quarterly earnings that beat expectations while telecom BCE Inc. received regulatory approval of its proposed $3.38-billion takeover of Astral Media Inc.
The Competition Bureau approved the BCE-Astral deal with some major strings attached — the telecom company will have to sell several of Astral’s pay and specialty television channels. BCE shares gained 12 cents to $46.87.
The bureau said that without the sale of those channels the deal would likely have led to higher prices and reduced choices for television programming. The deal still requires approval from the CRTC.
In the financial sector, Scotiabank had $1.63 billion of net income or $1.25 a share in the latest quarter, up 13% from a year ago. Ex-items, the bank’s earnings were $1.27, two cents better than expectations. Scotiabank also hiked its quarterly dividend by three cents to 60 cents a share and its shares gained 45 cents to $61.32.
The base metals sector was a major gainer while May copper on the Nymex rose one cent to $3.51 U.S. Teck Resources gained 30 cents to $30.55 while Lundin Mining was ahead 12 cents to $4.68.
Among energy plays, Cenovus Energy advanced 30 cents to $32.12.
The gold sector was down, even as Iamgold was ahead two cents to $6.34.
The Scotiabank results helped push the financials sector up with Manulife Financial up 17 cents to $15.37.
The tech sector also supported the TSX as MacDonald Dettwiler & Assoc. were ahead $2.75 to $73.00.
Defensive sectors were in decline with the utilities sector down as Atlantic Power fell 23 cents to $5.83.
Meanwhile, the Canadian retail landscape starts to undergo a big change today. U.S. discount giant Target opened the first of its
Canadian outlets in three Ontario locations (Guelph, Fergus and Milton). The Minneapolis-based retailer is expected to open between 125 and 135 locations in Canada this year, starting in Ontario.
ON BAYSTREET
The TSX Venture Exchange recovered 15.06 points to 1,112.23
In all, 10 of the 14 Toronto subgroups were higher on the day, led by global base metals, up 1.1%, while metals and mining and health-care were each 0.9% to the good.
The four laggards were weighed by utilities, down 0.8%, consumer staples, off 0.2%, and industrials, sliding 0.1%.
ON WALLSTREET
The Dow Jones industrial average climbed to a new record high Tuesday.
The blue-chip index spiked 125.95 points, to 14,253.80. That topped the Dow's closing records that were set in October 2007.
The S&P 500 index picked up 14.81 points to 1,539.81, and is trading at its highest level since October 2007, and only about 2% away from its record closing high -- also set in October 2007.
The tech-heavy NASDAQ Composite gained 42.10 points to 3,224.13.
Stocks are also considered cheaper now. They were trading at 17 times earnings estimates in 2007. Currently, stocks are valued at about 14 times earnings estimates for 2013.
In corporate news, JC Penney's shares tumbled more than 9% after Vornado Realty Trust, one of the retailer's biggest shareholders, reportedly dumped 40% of its stake. The struggling retailer is in the third week of a court battle with Macy's claims that Martha Stewart Living
Omnimedia violated a previous agreement with Macy's in entering into a new partnership with J.C. Penney.
Genworth Financial Inc. shares rose on rumors that the company is planning a sale.
Apple, which hit a new 52-week low on Monday, enjoyed a bounce with the broader market. Shares rose nearly 2% Tuesday, but the stock is still down nearly 20% this year. Meanwhile, Google continues to hit new highs.
After the market close, gun maker Smith & Wesson Holding Co is expected to report strong quarterly results. Gun sales have surged in recent months amid speculation about new gun control laws.
Investors are looking for any signs of progress in talks to end the budget impasse in Washington, known as sequester. The Obama administration has started making $85 billion U.S. of cuts and some federal workers have started getting furlough notices.
On the economic front Tuesday, the Institute for Supply Management's monthly index on service sector business activity rose to 56 in February, a slight improvement from 55.2 the prior month. Economists were forecasting a reading of 55.4.
Prices on the 10-year U.S. Treasury stepped back, raising yields to 1.89% from Monday’s 1.88%. Treasury prices and yields move in opposite directions.
Oil prices gained 72 cents to $90.84 U.S. a barrel.
Gold prices gained $3.60 to $1,575.50 U.S. an ounce.
