The Toronto stock market was slightly higher Thursday as relief that U.S. lawmakers have headed off a potential default was muted by the realization that Republicans and Democrats will be locking horns again over the debt issue in just a few months.
The S&P/TSX composite index gained 23.12 points to greet noon Thursday at 12,980.33
The Canadian dollar surged 0.40 cents to 97.24 cents U.S.
The telecom sector declined, after the federal government outlined plans in its throne speech Wednesday that would mandate an unbundling of cable TV offerings.
The Conservatives are expected to instruct Canada's broadcast regulator to require that cable and satellite TV service providers offer pick-and-pay pricing, where consumers can choose to pay for individual channels. But industry insiders warn that such pricing could mean fewer channels.
There was also a promise to reduce smart phone roaming charges and Rogers Communications was off 19 cents to $45.62.
Worries that the U.S. deal to avoid default only postpones the debt problems helped push commodity prices lower.
Among energy plays, Canadian Natural Resources fell 30 cents to $33.46.
In the gold sector, Goldcorp improved by 85 cents to $25.26.
The base metals component rose even as December copper slipped three cents to $3.28 U.S. a pound. Teck Resources ran up 39 cents to $28.30.
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 17.34 points to 943.22
The 14 Toronto subgroups were evenly divided between gainers and losers, gold soaring 4.2%, while materials powered up 2.6%, and metals and mining progressed 1.1%.
The seven laggards were weighed mostly by information technology, down 1.5%, telecoms, off 0.6%, and industrials, sliding 0.4%.
ON WALLSTREET
With the fiscal crisis in Washington temporarily averted, investors took unfavourable cues Thursday from the latest corporate results.
The Dow Jones Industrials faded 56.64 points to pause for lunch at 15,317.20, dragged down by shares of IBM, which reported weak sales growth late Wednesday. Fellow Dow components Goldman Sachs and UnitedHealth were also under heavy pressure.
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.
The S&P 500 index recovered 5.13 points to 1,726.67. The NASDAQ picked up 11.25 points to 3,850.68
In corporate news, IBM shares sank 6% after the tech giant reported quarterly sales that fell well short of expectations. Shares of eBay fell 3% 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.
Shares of UnitedHealth fell after the company trimmed its outlook for earnings growth this year.
AMR Corp., the parent of American Airlines that's now in bankruptcy, reported a record third-quarter operating profit. The company was also upgraded by analysts at JPMorgan, sending shares were up 8%.
Dow component Verizon jumped after the company reported a double-digit profit increase for the quarter thanks to strong gains in wireless subscribers. Verizon also said it wasn't able to meet customer demand for new iPhones because of supply constraints. Apple shares edged higher after topping $500 U.S. a share earlier this week.
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 2.61% from Wednesday’s 2.67%. Treasury prices and yields move in opposite directions.
Oil prices slid $1.91 to $100.38 U.S. a barrel.
Gold prices gained $35.90 to $1,318.20 U.S. an ounce.
