MD: TSX little changed amid rising commodities, positive economic data
TORONTO - The Toronto stock market was little changed Thursday even as investors took in some economic reports that made them feel somewhat better about economic prospects.
The S&P/TSX composite index inched 5.4 points lower to 11,391.9 amid higher energy and mining stocks and sliding gold stocks.
The TSX Venture Exchange ticked 0.44 of a point higher to 1,361.92 while the Canadian dollar moved up 0.54 cent to 95.98 cents US.
The TSX energy sector gained 0.53 per cent as the August crude contract on the New York Mercantile Exchange ran ahead $1.40 to US$75.47 a barrel. The American Petroleum Institute reported late Wednesday that U.S. crude inventories plunged 7.3 million barrels last week, much more than the drop of 3.5 million barrels forecast in an analyst survey by Platts, the energy information arm of McGraw-Hill Cos.
Inventories of gasoline and distillates also fell, the API said. The Energy Department’s Energy Information Administration reports its weekly supply data later Thursday.
Suncor Energy (TSX:SU) climbed 19 cents to $32.69 .
The base metals sector was 0.74 per cent higher as the September copper contract on the Nymex lost early traction and was unchanged at US$3.02 a pound. Teck Resources (TSX:TCK.B) gained 31 cents to $33.96.
The gold sector was the weakest component, down 1.75 per cent as the August bullion contract in New York lost $5.50 to US$1,193.40 an ounce. Barrick Gold Corp. (TSX:ABX) fell 62 cents to $45.35.
Economic hopes were lifted after the International Monetary Fund raised its 2010 world growth forecast to 4.6 per cent from 4.2 per cent in April and boosted estimates for the United States, China and Canada.
The IMF also warned that the European debt crisis could pose a risk to global growth but said a return to recession was unlikely.
A strong profit forecast by State Street bank in the U.S. on Wednesday encouraged buyers to pick up stocks that have been beaten down recently because of worries the global recovery is losing traction. Bargain hunting helped push the TSX up 197 points on Wednesday — its second straight strong triple digit advance — while the Dow industrials jumped 275 points.
In Europe, the committee subjecting some of the region’s biggest banks to stress tests said it has widened the factors aimed at determining their financial health. That reinforced confidence in the results, which will be published later this month.
New York markets were higher as a positive reading on jobless insurance claims helped to compensate for early reports from U.S. retailers which showed sluggish June sales and shoppers buying mostly deeply discounted clothing amid escalating job worries.
New York's Dow Jones industrial average moved up 74.6 points to 10,092.8 as the U.S. Labour Department reported that claims for jobless aid dropped by 21,000 to a seasonally adjusted 454,000. The decline takes claims to their lowest level since early May, erasing the increases of the last two months.
“There have been a number of special factors skewing the data,” observed BMO Capital Markets senior economist Jennifer Lee, for example temporary hires for the U.S. census and uncertainty over the number of layoffs from the offshore oil drilling moratorium.
“The latest week is certainly reassuring but a few more weeks of improvement would be more comforting to make a more sweeping statement on the state of the job market. But this latest week does come as a relief.”
The Nasdaq composite index was ahead 12.49 points to 2,171.96 while the S&P 500 index climbed 7.15 points to 1,067.4.
In corporate news, Cott Corp., Canada’s biggest soft-drink maker, is acquiring a major American private-label juice company for more than half a billion dollars. Cott (TSX:BCB) has signed an agreement to acquire privately owned Cliffstar Corp., based in Dunkirk, N.Y. near Buffalo. Cott shares rose 25 cents to $6.25.
Cogeco Cable Inc. (TSX:CCA), Canada's fourth-largest cable company, reported quarterly profit of $31.2 million, down slightly from $32.4 million a year ago. Revenue came in at $319.3 million, up from $305 million in the year-earlier period. Its shares rose 22 cents to $34.97.
Drugmaker Merck & Co. said Thursday it is shutting down eight manufacturing plants and eight research sites around the world including one in Montreal, in the latest phase in its strategic pruning of operations. The moves, which include consolidating some offices, are part of ongoing consolidation following Merck’s acquisition of Schering-Plough Corp. last November. In New York, Merck shares gained 23 cents to US$35.66.
Mala Noche Resources Corp. (TSXV:MLA) has increased the price it will pay for Goldcorp’s San Dimas mines in Mexico by about five per cent and revised other terms of the transaction. The junior mining company, based in Vancouver, will now pay US$510 million in cash, shares and debt to Goldcorp (TSX:G), up from $500 million announced last month. Mala Noche shares were unchanged at 28 cents.
Increasing confidence also sent overseas markets higher.
In Asia, Japan’s benchmark Nikkei 225 stock index jumped 2.8 per cent, Australia’s S&P/ASX 200 climbed 2.4 per cent and Hong Kong’s Hang Seng index rose one per cent.
London's FTSE 100 index gained 1.77 per cent, Frankfurt's DAX was up 0.63 per cent and the Paris CAC 40 advanced 1.67 per cent.
Meanwhile, interest rates are staying ultra-low in Europe.
The European Central Bank has left its benchmark interest rate unchanged at a record low of one per cent for the 14th consecutive month. And The Bank of England has kept its base interest rate at a record low of 0.5 per cent for the 17th consecutive month and left its asset purchasing program on hold.
