The Toronto stock market registered a solid gain Tuesday as investors continued to pick up beaten-down mining stocks and took in two disappointing earnings reports from the retail sector.
The S&P/TSX Composite Index vaulted 88.22 points to end Tuesday’s trading at 12,297.09
The Canadian dollar picked up 0.29 cents to 95.01 cents U.S.
Meanwhile, executives at smartphone maker BlackBerry were in investor crosshairs as the company held its annual meeting.
BlackBerry reported a loss for its most recent quarter, when most analysts had expected it to turn a profit. At the meeting, chief executive Thorsten Heins encouraged shareholders to remain patient as the company pushes ahead with a plan to become profitable again.
Heins says it's going to take time, and just how long is unpredictable due to the volatile smartphone industry. Its stock was up five cents to $10.15, well off its 52-week high of $18.49.
Shares in Jean Coutu Group fell 36 cents to $17.45 after the pharmacy retailer said it earned $108.6 million or 51 cents per share, down from $397.3 million, or $1.81 per share, a year ago, mainly due to much smaller gains from the sale of shares in U.S. pharmacy chain Rite Aid.
Excluding one-time items, earnings were $54.2 million or 26 cents per share, which matched expectations. Revenue was almost unchanged from a year ago at $681.6 million, which missed forecasts for more than $702 million.
Shares of Alimentation Couche-Tard Inc. were also lower after it reported a large year-over-year increase in net earnings in the fourth quarter, but fell short of analyst estimates on adjusted profit.
Excluding one-time items, the convenience store and gas station operator said it earned 61 cents U.S. per share, well below expectations of 77 cents per share. Its shares were down $3.08 or 5% at $58.31.
Mining stocks benefited from bargain hunting for a second day.
Falling demand for resources has pushed the TSX base metals sector down 32% so far this year. The gold sector has fared much worse, down 47% year to date as the U.S. Federal Reserve signaled it could start tapering its economic stimulus program of bond purchases later in the year while inflationary pressures remain tame.
On Tuesday, the base metals sector was ahead even as copper prices fell further on demand concerns, with the September contract down three cents to $3.06 U.S. a pound. HudBay Minerals climbed 19 cents to $6.83 and Teck Resources advanced $1.19, or 5.6%, to $22.37.
Railway stocks advanced alongside mining stocks after losing some ground Monday amid questions about the transport of crude oil in the wake of a derailment over the weekend in Lac-Megantic, Que., killing at least 13 people and leaving nearly 40 more missing.
Canadian National Railway rose $1.10, or 1.1%, to $103.83 while Canadian Pacific climbed $1.77, or 1.4%, to $128.46.
The gold sector rose as gold prices picked up slightly with the August bullion contract in New York ahead (see below). Eldorado Gold gained 19 cents to $6.42 while Goldcorp Inc. ran ahead 51 cents to $25.42.
The energy sector swung from negative ground to advance. Canadian Oil Sands fell 95 cents to $19.83 while Imperial Oil improved by 79 cents to $42.57.
Speaking of things economic, Canada Mortgage and Housing Corporation reported that housing starts fell in June from May, but less than expected.
The seasonally adjusted annualized rate of housing starts was 199,586 units in June, a decrease from May, which was revised higher to 204,616. Analysts polled by Reuters had expected 187,000 starts in June.
In other economic news, the International Monetary Fund upgraded Canada's growth expectations for this year to 1.7% from 1.5%, but warned that overall global conditions remain uneven, weak and perilous.
The IMF expects growth around the world will barely top 3% this year, moderately lower than previously thought, and only start showing signs of life at 3.8% in 2014.
ON BAYSTREET
The TSX Venture Exchange edged higher 3.77 points to 874.94
Nine of the 14 Toronto subgroups ended the day in the green, led by metals and mining stocks, up 2.6%, global base metals, strengthening 2%, and materials, climbing 1.7%.
The five laggards were kept down by consumer staples, sliding 1%, information technology, off 0.7%, and utilities, down 0.4%.
ON WALLSTREET
Investors pushed stocks higher Tuesday after a positive start to earnings season gave global markets a tailwind.
The Dow Jones Industrials gained 75.65 points to 15,300.30
The S&P 500 index progressed 12.25 points to 1,652.71. The NASDAQ Composite increased 19.43 points to 3,504.26
Alcoa became the first Dow component to report second-quarter results after the markets closed Monday.
Alcoa's results, which topped forecasts, combined with lingering sentiment from last week's better-than-expected jobs report were helping support stocks, according to some experts.
Overall, earnings for companies in the S&P 500 are expected to grow 0.8% versus last year, according to FactSet.
That would be the worst since the third quarter of 2012, when the growth rate declined.
While companies could beat analysts' low expectations, investors are eager to see revenue growth based on consumer demand, rather than cost cutting.
Firms including Yum! Brand, JPMorgan and Wells Fargo are set to report results later this week.
Shares of FedEx jumped 7% on speculation that activist investor Bill Ackman might take a stake in the parcel delivery company.
BlackBerry shares rose – as noted above – and as the smartphone maker held its annual meeting with shareholders.
Tesla Motors is joining the NASDAQ 100 and replacing software company Oracle. The electric car maker's stock rose above $125 U.S. -- more than four times what the stock was worth at the beginning of the year.
Barnes & Noble shares rebounded, one day after the bookseller announced that its CEO was resigning. Barnes & Noble has no immediate plans to name a new CEO as it moves through a "transitional" phase.
Shares of Intuitive Surgical Inc. plunged after the surgical robotics company pre-announced results that disappointed investors.
Shares of Kroger rose to an all-time higher after it agreed to buy rival Harris Teeter in an all-cash deal valued at $2.5 billion U.S.
NYSE Euronext won a contact to take over Libor, the London interbank offered rate that has been at the epicenter of a wide-ranging bid rigging scandal.
The International Monetary Fund cut its world economic growth forecast for the third time this year due to slowing emerging markets and a prolonged recession in the euro-zone.
In an update to its World Economic Outlook, the IMF said Tuesday that it now expects world output to expand by just 3.1% in 2013, down from 3.3% in April. In January, it was forecasting growth of 3.5%.
Prices for the 10-year U.S. Treasury inched up, weighing yields down to 2.63% from Monday’s 2.64%. Treasury prices and yields move in opposite directions.
Oil prices gained 91 cents to $104.05 U.S. a barrel.
Gold prices gained $12.10 to $1,247 U.S. an ounce.
