CA: TSX heads for positive open after tech bellwether Intel beats expectations
The Toronto stock market headed for a slightly higher open after tech bellwether Intel Corp. reported its biggest quarterly profit in a decade.
Topics : TSX , Intel , JPMorgan Chase and Bank of America , U.S. , New York , Toronto
The Canadian dollar was off 0.16 of a cent to 96.6 cents US.
U.S. futures also indicated a positive open with the Dow industrial futures ahead 27 points to 10,315, the Nasdaq futures rose 13.75 points to 1,856.25 while the S&P 500 futures were ahead 2.9 points to 1,092.6.
Intel, the world's biggest chipmaker, posted net income of US$2.89 billion, or 51 cents per share, for the quarter, well above the 43 cents that analysts expected, as large corporations started buying new computers for employees.
Revenue also beat expectations, coming in at US$10.88 billion.
Intel's profit forecast also got a lift. It now expects gross profit margin –a key measure of a company's ability to control costs – of 64 per cent to 68 per cent of revenue for the full year. Its previous forecast was for 62 per cent to 66 per cent and its stock was about about six per cent in pre-market trading in New York.
Intel's profit and outlook are considered good signs for the U.S. economy because the chipmaker manufactures 80 per cent of the processors that run PCs and has a large global reach.
Fellow tech heavyweight Google, financial powerhouses JPMorgan Chase and Bank of America and conglomerate General Electric are also reporting earnings this week.
In Canadian earnings news, Corus Entertainment Inc. (TSX:CJR.B) had a $31.4-million profit for its fiscal third quarter, as the broadcaster's revenues increased 12 per cent over last year. The Toronto company reported Wednesday its net income was the equivalent of 39 cents per share and contrasted with a year-earlier loss of $145 million or $1.81 per share.
The major economic item on Wednesday's calendar was U.S. retail sales for June. The Commerce Department is expected to say sales fell 0.2 per cent, which would still be an improvement from the 1.2 per cent drop in May.
The TSX energy sector could find weakness amid lower oil prices. The August crude contract on the New York Mercantile Exchange slipped 58 cents to US$76.57 a barrel ahead of U.S. inventory data coming out later in the morning.
On Tuesday, the American Petroleum Institute said that crude inventories rose 1.7 million barrels last week, against a drop of 2.6 million barrels forecast in an analyst survey by Platts, the energy information arm of McGraw-Hill Cos.
Bullion prices also softened with the August gold contract on the Nymex down $4.40 to US$1,209.10 an ounce.
Copper advanced for a second day as the September copper contract in New York rose two cents to US$3.03 a pound.
The TSX and the Dow industrials registered solid gains on Tuesday after aluminum giant Alcoa Inc. kicked off the second quarter earnings season by delivering earnings and revenue that beat expectations, along with a strong outlook for aluminum demand.
Intel's results and buoyant growth figures in Singapore helped Asian markets close higher.
Singapore raised its forecast for economic growth this year to a range of 13 per cent to 15 per cent from the previous forecast of 7 per cent to 9 per cent. It also raised its forecast for export growth as global demand has stayed strong amid Europe's debt and fiscal crisis.
Japan's Nikkei 225 stock average climbed 2.7 per cent while Hong Kong's Hang Seng rose 0.6 per cent.
European bourses turned lower with London's FTSE 100 index down 0.73 per cent, Frankfurt's DAX declined 0.16 per cent while the Paris CAC 40 was down 0.65 per cent.
In other corporate news, West 49 Inc. shares may give up some of their recent gains after an American sports apparel retailer decided against making a bid for the Canadian sportswear firm (TSX:WXX). The stock jumped last week after Zumiez Inc. (Nasdaq:ZUMZ) said it might be prepared to top a $99-million takeover offer that West 49 had received from Australia's Billabong International.
Pulse Seismic Inc. (TSX:PSD) will now pay an additional $5.7 million under a revised agreement to buy the entire 3D and 2D seismic data library owned by Divestco Inc. (TSX:DVT). The revised purchase price is $55.7 million cash plus nearly 14.3 million common shares of Pulse Seismic. Based on Tuesday's closing stock price, Pulse will pay a total of $75 million.
