RTTN: TSX Slips As Stimulus Hope Fades- Canadian Commentary
(RTTNews) - Erasing early trading gains, Canadian stocks were lingering in the red Thursday morning as Federal Reserve President Ben Bernanke, in his testimony today, failed to hint on further monetary stimulus measures. In early trading, stocks moved up after a surprise interest rate cut decision by China helped energy prices extend gains.
Earlier today, China's central bank cut benchmark interest rates by 25 basis points and the move had assured investors that central banks are keen to support economy as and when needed.
The S&P/TSX Composite Index slipped 21.68 points or 0.19 percent to 11,611.72, after adding nearly 300 points or 3 percent in the past two sessions. Earlier this week, stocks dived near their 8-month low amid lingering concerns over the euro zone financial situation.
The Diversified Materials Index was the major gainer, adding nearly 3 percent, with Teck Resources (TCK_B.TO) and First Quantum Minerals (FM.TO) surging around 4 percent each. Inmet Mining (IMN.TO) gained 2 percent.
Grain handler Viterra Inc. (VT.TO) edged up 0.25 percent after announcing that Glencore International Plc has obtained necessary approvals from the Australian authorities to acquire it for C$16.25 per share, in cash.
The price of crude oil moved up Thursday morning as traders digest a interest rate cut by China, which was aimed to support economic growth in the second largest commodity consuming nation. Crude for July gained $0.42 to $85.44 a barrel.
In the oil patch, Niko Resources (NKO.TO) moved up 3 percent. Oil and gas industry services provider American Energy Partners (NOA.TO) surged over 7 percent after reporting a fourth-quarter net loss of $16.9 million or $0.47 per share, narrower than the net loss of $30.5 million or $0.84 per share in the comparable period last year.
Meanwhile, gold stocks were trading lower amid a fall in bullion prices. The price of gold was snapping its two-session winning streak as the U.S. dollar was trading firm. Gold for August shed $31.70 to $1,602.50 an ounce.
Barrick Gold (ABX.TO), Agnico-Eagle Mines (AEM.TO), Detour Gold (DGC.TO) and Goldcorp. (G.TO) were down around 3 percent each.
Diamond miner and retailer Harry Winston Diamond (HW.TO) slipped nearly despite reporting a much improved first-quarter net profit of $11.6 million or $0.14 per share compared to $3.6 million or $0.04 per share in the same period last year. Analysts were expecting the company to report earnings of $0.19 per share for the quarter.
Lululemon Athletica Inc. (LLL.TO) dived 9 percent after lowering its guidance. The athletic apparel and accessories firm reported improved first-quarter net income of $43.64 million or $0.32 per share, compared to last year's $33.37 million or $0.23 per share. Analysts were expecting the company to report earnings of $0.30 per share this quarter. For fiscal 2012, the company now projects net revenue of $1.32 billion - $1.34 billion and earnings per share of $1.55 - $1.60. Analysts anticipate earnings of $1.63 per share and revenue of $1.35 billion for the full year.
Sandvine Corp. (SVC.TO) plummeted over 14 percent after lowering its guidance. The computer hardware company said it expects second-quarter revenue in the range of $18.0 million - $18.5 million, below its previous expectations as certain large purchase decisions continue to be pushed out.
Software and services company Enghouse Systems (ESL.TO) shed 2 percent despite reporting improved second-quarter net income of C$4.2 million or C$0.16 per share compared to C$2.1 million or C$0.08 per share in the same period last year.
In economic news from the U.S., the Labor Department said new claims for unemployment benefits fell slightly more than expected for the week ending June 02. New figures put the level of initial jobless claims at 377,000 for the week, on a seasonally adjusted basis, a drop of 12,000 from the previous week's revised level of 389,000.
Elsewhere, the Bank of England maintained its record low 0.50 percent interest rate, as widely expected.
