Equity markets were almost uniformly positive Tuesday on both sides of the border, particularly in Canada, where investors were expecting constructive steps in the federal budget, handed down after the markets closed.
Stocks rode the backs of CP Rail, whose earnings statement was seen as helpful, and the financial sector, which finished the day ahead
U.S. markets lost momentum, despite a mix of positive earnings reports as a widely-used measure of consumer confidence sank to a record low, but recovered to finish in the black.
The S&P TSX Composite Index had improved 103.1 points at the closing bell to 8,759.6
On Parliament Hill. the budget was expected to offer modest tax breaks and a flood of spending that will see Canada sink into a $34-billion deficit following 12 years of surplus budgets.
There were also provisions that would affect credit card companies and commercial banks. Ottawa would claim the right to regulate when credit-card companies slam customers with unforeseen rate hikes.
Shares in Canadian Pacific Railway $2.19 higher to $39.89 after the company said fourth-quarter profit slipped to $201 million dollars from $342 million a year earlier. It is also cutting its spending plans for this year.
Canadian National Railways pushed ahead $1.19 to $43.10.
The financial sector was ahead following a rise Monday after British bank Barclays PLC said that it will post better than expected profits for 2008.
Markets had feared the bank would be next in line to be rescued by the state.
Royal Bank gained 95 cents to $30.46 while Scotiabank improved $1.14 to $29.14.
The information technology sector was also supportive. CGI Group Inc. says profits for the first quarter of 2009 rose 10.5% to $79.5 million, or 26 cents a share, compared to year-earlier earnings of $71.9 million or 22 cents a share. Quarterly revenue rose 12% to $1 billion and its shares rose 25 cents to $9.90.
Research In Motion Ltd. rose 80 cents to $63.14. The BlackBerry maker retreated five per cent Monday after a report in the Wall Street Journal pointed to a rocky debut for the company's BlackBerry Storm, its most direct competitor with Apple Inc.'s iPhone.
The Canadian dollar faded 0.23 cents to 81.55 cents U.S.
BAYSTREET
Of the 13 TSX sub-groups, nine advanced, led by financials, ahead 3.8%, health care, up 3.1% and industrials, close behind.
The four losing groups were weighed down by metals and mining, off 3.1%, materials, lagging 1.6% and gold, 1.5% less shiny.
The TSX Venture Exchange gained 0.71 points to 869.39, while the NASDAQ Canada index was better by 23.65 to 535.17
ON WALLSTREET
Stocks stateside gained Tuesday afternoon, rising for the third straight session, as investors breathed a sigh of relief that some of the quarterly earnings were less terrible than had been expected.
The Dow Jones industrials index managed to hang onto its gains, picking up 58.70 points to 8,174.73. The Standard & Poor's 500 index added 9.13 points to 845.70. The Nasdaq composite index was up 15.44 points to 1,504.90.
On the political front, Timothy Geithner's approval as Treasury secretary seemed to boost confidence that the Obama administration's $825-billion stimulus package could get passed, despite some Republican opposition.
Economically speaking, U.S. consumer confidence hit a record low in January, according to the monthly Conference Board index reported Tuesday, as worries worsened about future income. The January consumer confidence index fell to 37.7 from an upwardly revised 38.6 in December.
Economists surveyed by MarketWatch had expected a January reading of 38.
Also, the Federal Reserve holds its two-day policy-setting meeting Tuesday and Wednesday, with an announcement expected Wednesday afternoon. The central bank is expected to keep short-term interest rates near zero, where it set them at its last meeting. However, as always, the statement that accompanies the decision will be closely scrutinized.
Specialty glass and ceramics maker Corning Inc. said fourth-quarter profit plunged 65% to $249 million U.S. It also said it is cutting 3,500 jobs, or 13% of its payroll, as demand slumps for glass used in flat-screen televisions and computers and its shares dipped 25 cents to $9.70 U.S.
Chemicals maker DuPont says it swung to a fourth-quarter loss of $629 million U.S. as the firm was hurt by a hefty restructuring charge. Revenue fell 16% to $6.07 billion U.S., as a steep decline in global industrial production magnified slowing consumer and construction spending and its shares declined 22 cents to $22.96.
In other earnings news, Dow component American Express reported lower quarterly sales and earnings late Monday that narrowly missed expectations. However, the so-called "whisper" number was much worse and investors seemed relieved that AmEx's results were not weaker. Shares gained 8%.
Texas Instruments reported a smaller-than-expected drop in quarterly profit after the close Monday and also said it was cutting 3,400 jobs. Shares gained almost 5% Tuesday.
Treasury prices rallied, lowering the yield on the benchmark 10-year note to 2.54% from 2.63% Monday as investors pulled money out of the safe-haven investment. Treasury prices and yields move in opposite directions. Yields on the 2-year, 10-year and 30-year Treasurys all hit record lows last month.
U.S. light crude oil for March delivery fell $4.15 to settle at $41.58 U.S. a barrel on the New York Mercantile Exchange.
COMEX gold for April delivery fell $9.30 to settle at $901.40 U.S. an ounce.
