TORONTO – The Toronto Stock Exchange opened modestly higher as commodity prices were buoyed by hopes data this week will show the U.S. housing market is in recovery mode.
The S&P/TSX composite index added 33.06 points to 12,530 shortly after markets opened. The junior TSX Venture Exchange shed 0.34 of a point to 1,605.83.
The Canadian dollar was up 0.12 of a cent to 100.94 cents US.
April oil prices rose 52 cents to US$107.58 a barrel, while gold prices gained US$1.40 to US$1,657.20 per ounce. Copper prices added a cent to US$3.89 per pound.
Higher oil prices sent the energy sector on the TSX higher, with shares in Canadian Natural Resources (TSX:CNQ) up more than one per cent, or 41 cents, to C$35.45.
Wall Street opened mixed, with the Dow Jones industrial index down 17.78 points to 13,214.84, the Nasdaq up 0.95 of a point to 3,056.21 and the broader S&P 500 slipping 0.83 of a point to 1,403.34.
Statistics Canada reported Monday morning that wholesale sales slipped one per cent in January to $49 billion, largely because of lower sales of motor vehicles and parts.
The agency said it was the second decrease in three months after a general upward trend that began last May.
“Canadian wholesalers in January did much worse than the street’s expectations, with sales falling by one per cent against expectations of a slight increase,” said CIBC World Markets economist Emanuella Enenajor.
“Taken together with the month’s weak manufacturing shipments figure, January is shaping up to be a soft month. Although Thursday’s retail print could point to healthy gains in that sector, we now expect January GDP to post at best a middling gain from the prior month.”
In an otherwise quiet week for economic data, investors will also look for Canadian data including January retail sales on Thursday and February’s Consumer Price Index on Friday.
“Inflation is expected to nudge up slightly for both headline and core (to 2.6 per cent and 2.2 per cent), with the former pumped by gasoline prices and the latter by a tough comparison to a year ago,” said Bank of Montreal’s deputy chief economist Douglas Porter.
“The retail report will be skewed by the massive 15 per cent surge in auto sales at the start of the year, and flattered by higher pump prices, but ex-auto, ex-gas sales will do well to hold steady. Large-scale retail sales fell 0.5 per cent year-over-year in the month, and the warm weather likely crushed seasonal goods sales.”
The Toronto market could certainly use a catalyst to restart a rally that seemed to run out of steam this month after almost five consecutive months of gains. The TSX closed a handful of points lower last week, adding up to a third consecutive weekly decline, leaving the TSX still up 4.5 per cent for this year to date.
That is in sharp contrast to the U.S. market, where the Dow industrials are up more than eight per cent year to date.
Traders will take in the latest reports on U.S. housing starts and sales figures for new and existing homes.
Economists expect housing starts rose by 0.3 per cent last month, while existing home sales gained 0.7 per cent and new home sales climbed by 1.4 per cent.
Also in the U.S., Apple (NASDAQ:AAPL) announced it is finally putting its cash hoard to work, introducing a quarterly dividend of $2.65 per share and starting a $10 billion share buyback program.
Apple says the dividend will start in its fiscal fourth quarter, which begins July 1. The buybacks will begin in its next fiscal year, starting Sept. 30.
Apple is sitting on $97.6 billion in cash and securities. For years, it has resisted calls to reward shareholders with some of that money. Since the death of CEO Steve Jobs, management has signalled that it’s been considering options for the money.
United Parcel Service Inc. said Monday it will buy Netherlands-based TNT Express NV for $6.77 billion (C5.16 billion), in a deal that will create a company with annual sales of C60 billion.
In Canadian corporate news, shares in grain handler Viterra Inc. (TSX:VT) have been halted as reports circulate the company may be close to announcing a takeover deal.
Ivanhoe Energy Inc. (TSX:IE) announced Monday it has amended a loan agreement with executive co-chairman Robert Friedland that could raise his stake in the company to 17.95 per cent from 15.49 per cent.
The deal involving Ivanhoe Energy and Ivanhoe Capital Finance Ltd., which concluded last week, amended a December 2011 loan agreement. It gives Friedland the right to convert each 96 cents of outstanding principal into one common share. Shares in the company were up three per cent or three cents to 98 cents per share.
Meanwhile, debt-loaded Greece recently qualified for a second multibillion dollar bailout after its private creditors took significant losses on their bond holdings to avoid losing even more money in a Greek bankruptcy. Now, new doubts are emerging about whether Greece will be able to deliver on austerity promises that were part of the bailout deal.
Britain’s FTSE 100 fell 0.4 per cent. Germany’s DAX dropped 0.6 per cent and France’s CAC-40 lost 0.7 per cent.
Further evidence from the U.S. last week that its economic recovery is gaining strength buoyed stocks elsewhere in Asia. The U.S. is a crucial market for the region’s exporters.
However, data also showed new home prices dropped in 45 Chinese cities in February, the official Xinhua News agency said, the result of government policies intended to cool property speculation.
In Asia, Hong Kong’s Hang Seng Index fell one per cent to 21,115.29 as falling home prices in China and its weak trade in the first two months of 2012 kept investors’ verve in check.
