The Toronto stock market struggled to find a foothold Wednesday amid upbeat earnings reports from some key U.S. companies, including technology giant Apple, and strength in commodity prices.
The S&P/TSX composite index lost 4.23 points to 11,625.65.
Apple (Nasdaq:AAPL) blew past expectations with a 61 per cent gain in revenue that set a new record for the company helped by the success of its iPad tablet. The company joined the likes of Coca-Cola (Nasdaq:COKE), Wells Fargo & Co. (NYSE:WFC) and Morgan Stanley (NYSE:MS) in beating analysts’ expectations.
The Canadian dollar gained 0.55 cent to 96.26 cents US following a quarter-point interest rate hike by the Bank of Canada on Tuesday.
Toronto’s base metals sector was the biggest gainer in early trading Wednesday, adding 2.6 per cent as the September copper contract on the New York Mercantile Exchange jumped 9.4 cents to US$3.10. Shares in Teck Resources Ltd. (TSX:TCK.B) climbed $1.49 or 4.5 per cent to C$35.80.
Gold stocks added 0.3 per cent as the August bullion contract was up $3.30 to US$1,195 an ounce. Shares in Goldcorp Inc. (TSX:G) gained 16 cents to C$42.36.
The oil sector dipped 0.1 per cent even as the September crude contract added 81 cents to US$78.39 a barrel, driven by a drop in crude inventories and a forecast from the U.S. National Hurricane Center that this year’s hurricane season could be the most intense since 2005 and possibly affect supplies. Shares in Suncor Energy Inc. (TSX:SU) fell nine cents to C$33.04
Financial stocks also slipped, losing 0.1 per cent as investors awaited guidance from U.S. Federal Reserve chairman Ben Bernanke when he gives his monetary policy report to a U.S. Senate committee Wednesday afternoon. Shares in Bank of Nova Scotia (TSX:BNS) lost 26 cents to C$50.82.
The TSX Venture Exchange gained 7.04 points to 1,370.24.
New York markets were mixed. The Dow Jones industrial average added 8.18 points to 10,238.14. The Nasdaq composite index was down 1.95 points at 2,220.54 while the S&P 500 index gained 1.68 points to 1,085.16.
U.S. investors will be watching Bernanke, who is scheduled to begin two days of testimony in Congress to discuss the Fed’s view on the strength of the economy. Bernanke is likely to say the economy isn’t headed back into recession, but he is also expected to be cautious in his optimism for near-term growth.
Without any major economic data, markets will also keep an eye on more earnings from U.S. companies.
Apple easily surpassed profit forecasts and, more importantly, raised its revenue outlook above analysts’ expectations when it released results after the market closed Tuesday.
Coke’s results, released early Wednesday, were also higher than forecast. Net income rose 16 per cent on higher sales of soft drinks and juices in every part of the world except Europe.
Internet company Yahoo, on the other hand, was hurt by weak revenue growth.
Two major banks also reported stronger earnings. San Francisco-based Wells Fargo & Co. and New York-based Morgan Stanley both earned more than analysts were forecasting.
Traders are trying to get a read on the economy through companies’ profit reports, but earnings have been mixed over the past week, which has led to volatile trading. Profit is mostly improving, but sales are not growing fast enough at some companies to reassure investors the recovery is picking up steam.
In Canadian news, Statistics Canada said wholesale sales slipped 0.1 per cent in May to $44.1 billion because of a sharp decline in the agricultural supplies industry.
Encana Corp. (TSX:ECA) said foreign exchange and hedging activity dragged it to a $505-million net loss in the second quarter, compared with a year-earlier profit of $92 million.
Encana’s revenue after royalties was $1.47 billion, down about $1 billion from the year-earlier period, before its oil business was spun off into Cenovus. Shares in the natural gas producer lost 92 cents or 2.6 per cent to $33.57.
Overseas, Britain’s FTSE 100 rose 1.9 per cent, Germany’s DAX index rose 1.3 per cent, and France’s CAC-40 gained 1.2 per cent. Japan’s Nikkei stock average fell 0.2 per cent and Hong Kong’s Hang Seng index gained 1.1 per cent.
