Equities in Toronto were flat at the open on Thursday as investors looked beyond Washington's last-minute debt default deal and focused on the effects of the 16-day government shutdown and prospects of a re-run next year.
The S&P/TSX composite index gained 12.57 points to start business Thursday at 12,969.78
The Canadian dollar surged 0.30 cents to 96.76 cents U.S.
BMO raised the price target on Air Canada to $6 from $5 and the rating outperform. It also raised the price target on Westjet Airlines to $26 from $23 and the rating to market perform as cost trends appear favourable and valuations remained inexpensive.
Air Canada shares dipped four cents to $4.95, while WestJet shares got lift of seven cents to $25.02.
RBC raised the rating on Enerplus Corp. to outperform and the price target to $22 from $20 on the company's operating momentum, relative valuation and improved capital discipline. Enerplus shares increased in price 53 cents each to $17.61.
CIBC cut the price target on SNC-Lavalin to $48 from $50 and the rating to outperform after the company reduced net income guidance. SNC shares dipped 11 cents to $42.02.
On the economic beat, Statistics Canada reported that foreigners bought only $2.1 billion worth of our investments during August, down from past months, and mostly focused on corporate debt instruments.
The agency also said that Canadian investment in foreign securities rose to $5.7 billion, the largest investment since November 2012.
ON BAYSTREET
The TSX Venture Exchange grew 16.33 points to 942.21
Nine of the 14 Toronto subgroups were lower after the first hour, weighed by information technology, off 1%, while industrials and telecoms ducked 0.5% each.
The five gainers were led by gold, up 4.5%, materials, up 2.9%, and metals and mining, ahead 1.1%.
ON WALLSTREET
With the fiscal crisis in Washington temporarily averted, investors were taking their cues Thursday from the latest corporate results. And those results weren't good.
The Dow Jones Industrials faded 83.55 points to open at 15,290.30, dragged down by shares of IBM and Goldman Sachs. Both stocks were pummeled following quarterly reports that disappointed investors. UnitedHealth, another Dow component, was also down due to a tepid forecast.
IBM and Goldman are the second and third highest weighted components in the Dow, which is weighted by stock price as opposed to market value like the S&P 500. UnitedHealth has the seventh biggest weighting. This means moves in these higher-priced stocks have an outsized impact on the Dow.
The S&P 500 index dipped 2.59 points to 1,718.95. The NASDAQ docked 4.96points to 3,834.47
In corporate news, IBM shares sank 6% after the tech giant reported quarterly sales that fell well short of expectations. Shares of eBay fell 5% after the company offered weak guidance.
Shares of Goldman Sachs fell after the firm reported a year-over-year revenue decline. At the same time, Goldman's earnings per share topped forecasts and the company hiked its dividend by a nickel to 55 cents U.S. UnitedHealth was down nearly 4% following its results.
Dow component Verizon jumped after the company reported a double-digit profit increase for the quarter thanks to strong gains in wireless subscribers.
Google is set to report its latest quarterly results following the closing bell
Stocks surged more than 1% Wednesday following news that Congress had reached a deal to reopen the federal government and avert a potentially catastrophic default. But the initial euphoria faded around the world Thursday and investors were beginning to wonder what happens when the government bumps up against the debt ceiling again in February.
China, the United States' biggest foreign creditor, welcomed the resolution of the debt ceiling crisis. But credit rating agency Dagong, which has close ties to the Chinese government, cut its rating on U.S. debt, saying the country was only able to remain solvent by raising new debts.
Investors were also concerned about the economic toll of the impasse, which shut down large parts of the government for 16 days. The shutdown comes with a $24-billion U.S. price tag, according to Standard & Poor's.
Prices for the 10-year U.S. Treasury gained strength, lowering yields to 2.62% from Wednesday’s 2.67%. Treasury prices and yields move in opposite directions.
Oil prices slid $1.31 to $100.98 U.S. a barrel.
Gold prices gained $34 to $1,316.30 U.S. an ounce.
