The Toronto stock market fell back near the closing bell Thursday, even amid encouraging news on U.S. employment and interest rates.
The S&P/TSX Composite Index ended the day lower by 4.86 points to 11,958.11, after spending much of the day in positive country.
Lululemon Athletica Inc. was a major gainer on the TSX after its profit more than doubled in the fourth quarter, rising to $28.5 million from $10.9 million in the same period a year earlier.
The specialty clothing retailer’s quarterly revenue also improved, rising to $160.6 million from $103.9 million and its shares ran up $3.54 or 9.6% to $40.45.
The Canadian dollar was up after declining almost nine-10ths of a cent on Wednesday.
The loonie's rise came a day after a warning from Bank of Canada governor Mark Carney that Canadians could face higher interest rates sooner than previously thought as a result of stubborn inflation and stronger economic growth. It has been thought for some time that the bank would boost rates some time after the end of the second quarter, but some economists now think the first move could come as early as the beginning of June.
Blue chips led the way to the TSX gain, led by a big climb in industrials. Railway stocks were especially active with Canadian National Railways gaining $1.23 to $61.40 in the wake of an upgrade by Credit Suisse to outperform from neutral and Canadian Pacific advanced $1.35 to $56.01.
The technology sector was ahead, with Celestica Inc. up 11 cents at $11.16.
Financials were also supportive with Manulife Financial ahead 14 cents at $20.14 and Scotiabank improved 41 cents to $51.73.
Commodity stocks lost early momentum as the U.S. dollar strengthened against other currencies as sovereign debt issues again prompted traders to seek the relative safe haven status of the greenback.
The base metals component was down slightly as May copper shed early gains and was unchanged at $3.35 U.S. a pound. Sherritt International fell 26 cents at $8.45 and Inmet Mining lost 82 cents to $55.53.
The energy sector moved up with Canadian Oil Sands Trust ahead 61 cents to $28.81.
The TSX global gold index moved into negative territory, as Goldcorp Inc. faded 69 cents to $37.54.
In other corporate news, Rogers Communications Inc. is partnering with TBayTel to expand its wireless coverage in northwestern Ontario. The agreement enables Rogers to deliver voice and data services over TBayTel’s third-generation network from just west of Sault Ste. Marie, Ont., to the Manitoba border. Rogers shares rose 29 cents to $34.86.
The Canadian dollar gained 0.21 cents to 97.64 cents U.S.
ON BAYSTREET
Nine of the 14 TSX subgroups ended the day in the green. Industrials were ahead 1.4%, information technology and real-estate stocks were up 0.8% each.
The five laggards were weighed by global base metals, down 1.7%, while gold and materials were off 1.5% each.
The TSX Venture Exchange faded 0.86 points to 1,550.56. The Nasdaq Canada index removed 3.91 points to 791.64.
ON WALLSTREET
In New York, stocks gave up gains Thursday, ending little changed, as a late-session bounce in the dollar sapped the strength out of a rally that had pushed the Dow, S&P 500 and Nasdaq near new 18-month highs.
The Dow Jones industrial average squeaked ahead 5.06 points by day’s end to 10,841.21. The S&P 500 index gave back 1.99 points to 1,165.73, while the tech-rich Nasdaq dropped 1.35 points to 2,397.41.
The market rallied through the early afternoon after Best Buy and Qualcomm issued upbeat profit forecasts and Federal Reserve Chairman Ben Bernanke said interest rates can stay low for a while.
But the advance crumbled in the last half-hour as the dollar firmed up and commodity prices and stocks cut gains. Treasury prices tumbled, boosting the corresponding yields after the government's auction of $32 billion U.S. in seven-year notes drew tepid demand.
Stocks fell Wednesday after Fitch's downgrade of Portugal's debt increased worries about euro zone debt issues, sending the dollar higher.
However, the trend has been largely to the upside over the last few weeks, with the major indexes rising in five of the last six weeks, pushing the Dow industrials closer to 11,000, a key psychological level.
Investors are also still reacting well to the end of the uncertainty around the health care bill, which President Obama signed into law Tuesday
A broad stock advance petered out by the close, with technology and retail shares holding on to gains and energy, materials, metal and mining stocks all retreating.
Market breadth turned mixed after having been positive through the session. Trading volume was moderate.
Electronics retailer Best Buy reported higher quarterly sales and earnings that topped estimates thanks to stronger sales of high-ticket items like notebook computers, mobile phones and flat-panel TVs.
The company also lifted its full-year earnings forecast due to increased demand for electronics in an improving economy.
Best Buy shares rose 5%.
Wireless chipmaker Qualcomm boosted its fiscal second-quarter earnings and sales forecast, due to a pickup in licensing revenue and chipset demand.
The Federal Reserve chairman, speaking before a House committee Thursday said that record-low rates are still needed to keep the economy chugging along.
He said that a still germinating economic recovery, a persistently high unemployment rate and little in the way of inflationary pressure mean the Fed has some breathing room when it comes to interest rates. He said higher rates will be needed at some point in the future, but not in the near term.
Bernanke was speaking before the House Financial Services Committee as part of a hearing on how the Fed plans to withdraw the emergency funding programs put in place at the height of the financial crisis.
His comments essentially echoed those in the statement accompanying last week's Fed decision, in which the central bank held interest rates steady at historic lows near 0%.
Worries about a Greek default were further cooled Thursday following a series of developments as a European Union (EU) summit was about to get underway in Brussels.
Reports say EU leaders want to put together a joint loan package for Greece of €22 billion to €23 billion that would be funded by euro zone nations and the International Monetary Fund, should Greece run out of borrowing options.
Earlier, Greece and Spain called for the EU to create a bailout fund to provide cheap loans to struggling member nations. Meanwhile, the European Central Bank extended looser funding rules.
Worries about a euro zone debt crisis were exacerbated Wednesday after ratings agency Fitch lowered Portugal's debt rating.
Like Greece, Portugal is one of the PIIGS, the five euro zone nations with serious debt problems. Ireland, Italy and Spain are the other three.
Dubai's government said it will inject $9.5 billion U.S. in funding into Dubai World and its property development arm Nakheel as part of a long-in-the-works restructuring plan. Even with the infusion, Dubai World will still owe its creditors more than $14 billion U.S.
Global markets were rocked in November when the city-state, the most populous of the seven United Arab Emirates, requested a freeze on $26 billion U.S. in debt payments, raising worries that it would default.
The $9.5-billion U.S. infusion was seen a step in the right direction.
On the economic front, the Department of Labor said the number of Americans filing for initial unemployment insurance fell to the lowest level in six weeks.
There were 442,000 claims last week, down 14,000 from a revised 456,000 in the previous week. Economists surveyed by Briefing.com had expected initial claims to fall slightly to 450,000.
Continuing claims, which reflect people who have been receiving benefits for a week or more, dropped to 4,648,000 during the week ending March 13, from 4,725,500 in the previous week.
The price of the benchmark 10-year note dropped again, lifting yields to 3.90% from Wednesday’s 3.83%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil surrendered 25 cents to $80.36 U.S.
Gold prices moved three dollars higher to $1,092 U.S.
