Toronto's main stock index fell hard today, hitting a one-week low as resource shares felt the brunt of a selloff sparked by China's unexpected decision to raise interest rates.
The S&P/TSX Composite closed down by 97.46 points, or .77%, to 12,570.55.
The price of oil for November delivery is down; dropping 4.54% to $79.31.
Gold for December delivery is red at the moment; down $36.10 to $1,335.10.
The Canadian Dollar is down against the US Dollar at the moment; off by .0001515 of a cent to .96815 U.S. cents.
CLOSING UPDATE --
The Saga rages on -- Saskatchewan will announce its position on BHP Billiton's hostile takeover bid for Potash Corp on Thursday. Shares of POT closed up 2.11% at $148.40 today.
Gold plays slide -- Dropping gold prices had a major impact on some key players. Shares of Barrick Gold dropped 3.3% to $46.91 and Goldcorp lost 2.6% to $43.45.
More Resource decliners -- Canadian Natural Resources fell back 1.4% to $37.28, while shares of Suncor Energy dropped .92% to close at $34.32.
Base Metals hit hard as well -- The base metals sector was down 3.37% as commodities dropped sharply today. Teck Resources gave back $1.03 to close at $43.89, while Quadra FNX Mining dropped $.80 cents to $14.68.
All is not bad -- Financials led the advancers as Scotiabank closed up $.43 cents at $55.52.
It's a deal -- Premium Brands Holdings Corp. announced that it has come to terms to acquire Seattle-based SK Food Group Inc. for $42.5 million. The Vancouver-based company saw its shares rise $.25 cents to $14.20 today with the agreement.
No fly zone -- Shares of Bombardier slipped back $.06 six cents, or 1.19% to $5.00 upon confirming today that developing two new luxury business jets will cost more than double what was expected (that equates to over $1 billion in total).
AFTERNOON UPDATE --
Let's Make a Deal -- Argonaut Gold announced a friendly offer to buy Pediment Gold, offering 0.625 of a share for each Pediment share. Argonaut stated that this equates to a price of $2.56 a Pediment share. Shares of Argonaut Gold are down 9.27% to $3.72 while shares of Pediment are up 31.18% to $2.23.
Offering -- Cline Mining announced that it intends to sell 25.7 million shares at $1.95 each to raise just over $50 million. While shares dove to start the day, the price per share has recovered to even at $2.16.
Drug News -- ProMetic and Allist Pharmaceuticals Inc. have come to terms to develop and commercialize two ProMetic's drug candidates in China. Per the agreement, ProMetic will receive $59 million in milestone payments and royalties on Chinese sales. Shares of PLI are up 20.83% to $0.145.
MORNING NEWS --
As expected, the Bank of Canada kept its benchmark interest rate unchanged at 1% today and cut growth forecasts for 2010 and 2011 on a slower than expected global economic recovery. The Bank cut its 2010 growth forecast to 3.0% from 3.5% in July and its 2011 forecast to 2.3% from 2.9%.
Commodities taking a hit -- Barrick Gold Corp., the world’s largest gold producer, is down 2.97% to $47.08, Kinross Gold Corp. is down 3.84% to $18.29 and Goldcorp Inc. has dropped 2.15% to $43.65 as China increased its lending and deposit rates after inflation accelerated, slowing demand for the metal as an alternative investment.
The poor Apple profit reports have hurt Research In Motion Ltd. today. Shares of RIM have dropped 1.22% to $48.65.
Bank of Nova Scotia, Canada’s third- largest bank, plans to buy a 15% stake in Vietnam Joint- Stock Commercial Bank for Industry & Trade.
ON BAYSTREET
Four of the TSX Subgroups closed in the green today. Financials finished up by .37% followed by utilities; up .34% and then health care; up .32%.
On the downside -- Metals and mining finished down 3.37%, followed by gold issues; down 3% and then base metals; down 2.61%.
The TSX Venture Exchange closed trading down by 23.30 points to 1814.91, while the Nasdaq Canada index closed in the red; down by 18.27 points to 619.97.
ON WALLSTREET
Stocks on Wall Street suffered the worst single day loss since August as commodities dropped, earnings appeared to confuse traders and news about Bank of America sent the Dow down more than 200 points before recovering to close near earlier lows for the day.
The Dow Jones Industrial Average closed down by 165.07 points, or 1.48% to 11,978.62. The S&P 500 dropped by 18.81 points, or 1.59%, to 1,165.90. The NASDAQ also closed in the red; down 43.71 points, or 1.76%, to 2,436.95.
The US Dollar is up against the euro by .0223 and gaining ground against the yen; up .3000.
Oil futures for November delivery are down $3.77 to $79.31.
The 10-year bond yield is down .0160 to 2.4750%.
DATA NEWS --
According to the International Council of Shopping Centers and Goldman Sachs, chain-store sales for the week ended Oct. 16 rose 1.7% from the year-earlier period, representing the slowest rate in at least four weeks. Sales fell .7% on a week-over-week basis.
The U.S. Commerce Department reported that new construction of U.S. houses increased for the third straight month in September. New home starts rose .3% in September to a seasonally adjusted 610,000 annualized units, which is well above the 578,000 anticipated by economists from MarketWatch. Starts of new single-family homes rose by 4.4% to 452,000, but starts of large apartment units slipped 9.7% to 158,000. Building permits, considered a leading indicator of housing construction, dropped 5.6% to a seasonally adjusted annual rate of 539,000. This is the lowest level of permits since April 2009, while the number of new construction homes is the highest level of starts since April.
China raises rates -- China's central bank surprised everyone with its first increase of interest rates in nearly three years, a move that reflects its concern about rising asset prices and stubborn inflation. The Bank announced that it was raising benchmark rates by 25 basis points, taking one-year deposit rates to 2.5% and one-year lending rates to 5.56%.
CLOSING UPDATE --
Speculation on B of A -- Bank of America Corp. shares rocketed downward today upon news that the Company will be requested to take back billions of dollars in failing mortgages originally issued by its subsidiary, Countrywide. The B of A stated that it will ''vigorously defend'' itself in this situation.
More Earnings news --
A Coke and a smile -- Coca-Cola announced better than expected earnings. Shares of KO closed up .57% at $60.34.
Goldman Sachs finished stong as it surpassed the earnings expectations by bringing in $.70 more per share than Wall Street had expected, despite a decline in trading and principal investment revenue. Shares of GS closed at $156.72, up 1.96%.
Capital One Financial help a financial sector that finally snapped late in the day as they announced earnings that surprised analysts. Shares of COF closed up 4.11% at $38.76.
Gilead Sciences Inc. reported that third-quarter net income rose to $704.9 million, or $.83 per share, from $673 million, or $.72 for the same quarter last year.Revenue for the three months ended Sept. 30 rose 8% to $1.94 billion from $1.8 billion. Shares of GILD are up 2.51% in afterhours to pare losses from the day.
Western Digital announced $197 million in fiscal first-quarter profit, or$.84 per share, compared with a profit of $288 million, or $1.25 a share, for 2009. Revenue was $2.4 billion, up from $2.2 billion. Shares of WDC closed at $30.20, down 4.04% during regular trading hours.
AFTERNOON UPDATE --
Saving Grace -- Utilities stocks are doing their best to turn the market around. The sector is getting some strength from American Electric on news of better-than-expected earnings and recommendation to its board to raise its quarterly dividend by 9.5% to $0.46 per share. Shares of AEP are up 1.51% to $36.88.
Consumer staples are doing their best to pare losses after disappointing earnings and lowered guidance from Supervalue. Shares of SVU are down 11.05% to $11.03.
Utility giant, American Electric Power Co. beat estimates when it reported earnings rose to $555 million, or $1.16 a share, up from $443 million, or $.93, as compared to the same quarter last year. Quarterly revenue increased 17% to $4.1 billion. Shares of AEP are trading up 1.46% to $36.86.
AT THE OPEN --
Earnings were the primary focus --
Bank of America Corp. reported a bigger quarterly net loss today, but excluding a sizable charge for writing off goodwill adjusted profit beat Wall Street expectations. The Bank posted a third-quarter net loss of $7.3 billion, or $.77 per share, compared with a net loss of $1 billion, or $.26 per share, for the same quarter in 2009. Excluding the goodwill-impairment charge of $10.4 billion, Bank of America earned $3.1 billion, or $.27 per share, in the most recent quarter. Shares of BAC are trading up .57% to $12.41.
Goldman Sachs reported third-quarter net income of $1.9 billion, or $2.98 a share, down from $3.19 billion, or $5.25 a share, for the same quarter in 2009. According to an analyst survey at Thomson Reuters, it was estimated that Goldman would report earnings of $2.32 a share. Shares of GS are trading up 1.12% to $155.42.
Johnson & Johnson reported an increase in third-quarter profit, even though sales came in moderately lower than the sales from the same quarter in 2009. JNJ reported earnings of $3.42 billion, or $1.23 a share, compared with $3.35 billion, $1.20 a share, for 2009. Revenue fell .7% to $14.98 billion, down from $15.08 billion. These numbers topped earnings of $1.15 a share, on revenue of $15.24 billion. Shares of JNJ are trading down 1.28% to $63.04.
Lockheed Martin cut its continuing-operations profit forecast to a range of $6.75 to $6.95 a share, from $7.15 to $7.35 a share. Net sales rose 5.6% to $11.38 billion. For the quarter ended Sept. 26, Lockheed reported net earnings fell to $571 million, or $1.57 a share, from $797 million, or $2.07 a share, for the same quarter in 2009. Earnings were reported at $565 million, or $1.55 a share, including a one-time charge of 32 cents a share for a voluntary executive separation program. These numbers fell shy of analyst estimates of $1.62 per share on $11.61 billion in sales. Shares of LMT are down 2.81% to $68.07.
Forest Laboratories Inc. reported second-quarter net income increased to $286.1 million, or $.61 a share, from $186.7 million, or $1.37 a share, in the same quarter of 2009. Net sales increased 7.7% to $1.04 billion, from $962.7 million, but fell short of Wall Street analyst’s expectations of earnings of $.93 per share and revenue of $1.06 billion. Shares of FRX are down 1.28% to $33.16.
Illinois Tool Works Inc. announced its third-quarter profit was $419.3 million, or $.83 per share, which is up from $302.4 million, or $.60 a share, for the third quarter in 2009. Operating revenues climbed to $4.02 billion, compared to $3.58 billion in the year prior. These numbers just topped profit estimates of $.82 per share on revenues of $4.03 billion. Shares of ITW are trading up 5.14% to $46.65.
Peabody Energy Corp. reported net income rose to $224.1 million, or $.83per share; well up from $106.8 million, or $.40 per share for the same period in 2009. Revenue rose to $1.86 billion from $1.66 billion, just beating Wall Street expectations of earnings of $.91 per share on revenue of $1.85 billion. Peabody stated that it expects 2010 adjusted earnings of $2.95 a share to $3.15 a share. Shares of BTU are up .58% to $51.83.
EMC Corp announced that its third-quarter net income rose 58%. The data storage company also bumped-up its full-year earnings outlook. EMC earned $472.5 million, or $.22 pershare, up from $298.2 million, or $.14 per share, in 2009. Restructuring and some other costs aside, profit was $.30 a share, compared to $.23 a share last year. The reported numbers beat analyst estimates of $.30 per share on revenue of $4.14 billion. Shares of EMC are trading down .36% to $20.73.
