TSX keeps bearings

Gold flying high

May 6, 2010 (Baystreet.ca) --

Bay Street stocks were hovering in positive territory in mid-morning deals Thursday amid positive earnings reports from a few big Canadian companies.

The S&P/TSX composite index remained ahead 21.50 points by midday to 11,896.63

A rebound in the country's building permits in March and encouraging economic data from across the border also helped lift sentiment.

Magna International rallied 17.78% after it was announced stockholders will vote on a plan to end founder Frank Stronach's control of the largest North American auto parts maker.

Additionally, Magna turned to profit in first-quarter, reporting net income $1.97 per share, compared to a loss of $1.79 per share in the prior year quarter. Analysts were expecting the company to report net income of $0.80 per share this quarter. The company declared a dividend of $0.18 per share.

Among gold stocks, Barrick Gold gained 2.26% and Lihir Gold was up 3.19%.

Red Back Mining added 0.73% to $25.00. Yesterday the company said it will sell 24 million shares to Kinross Gold for $25 each in a private placement. Kinross edged up 0.16%.

In the information technology space, MacDonald Dettwiler surged 13.62%. Yesterday, after the markets closed the company announced that it earned $0.71 per share in the first quarter, up from $0.60 in the year ago period.

Celestica Inc. rose 1.48%.

Wireless communications services provider BCE Inc. edged up 0.86% after reporting improved first-quarter net earnings of $0.79 per share, compared to $0.48 per share for the same period last year. The company declared a quarterly dividend of $0.435 per common share.

Financial services company Sun Life Financial added 1.92% after it swung to profit in first-quarter, reporting net income of $0.72 per share compared to a loss per share of $0.38 in the first quarter of 2009.

The company announced a quarterly dividend of $0.36 per common share. Sun Life maintained its outlook for adjusted earnings from operations in a range of $1.4-$1.7 billion.

Wealth management services provider Manulife Financial Corp. surged nearly 5%. The company turned to profit in first-quarter, reporting net income of $0.64 per share compared with a loss of $0.67 per share in the previous year. The company declared a quarterly dividend of $0.13 per share.

Global asset management company Brookfield Asset Management edged up 0.16%. The company swung to profit in first quarter, reporting net income of $0.25 per share, compared to a loss of $0.52 per share in the year-ago period. Analysts were expecting the company to record earnings of $0.22 per share in this quarter.

In the energy space, Encana Corp lost 1.08% and Celtic Exploration shed 2.10%.

Telecommunications industry services provider JDS Uniphase plummeted 16.20%. The company reported a narrower third quarter net loss of $0.05 per share, compared to a net loss of $0.47 per share in the year ago quarter.

Analysts were expecting the company to report net earnings of $0.09 per share. For the next quarter, the company expects non-GAAP net revenue to be in the range of $385 million to $410 million, higher than consensus estimates for revenues of $358.01 million.

Pharmaceutical company Biovail Corp. edged down 0.06% despite reporting first quarter net cash earnings of $0.55 per share, up from $0.42 per share a year ago. Excluding a $6.0-million legal settlement, cash earnings per share were $0.59 in this quarter, compared with $0.46 as similarly adjusted in the prior-year period, representing a 27% increase. Analysts were expecting the company to report earnings per share of $0.27 for the quarter.

In economic news, Statistics Canada said building permits increased 12.2% in March to $6.3 billion, after declining in the past four months.

The Canadian dollar stumbled 1.33 cents to 95.72 cents U.S.

ON BAYSTREET

Eight of the 14 TSX subgroups had fallen into negative territory by lunch time. Metals and mining stocks eased 2%, utilities were off 1.2%, and financials lost 1%.

The half-dozen gainers were led by gold, up 3.6%, consumer discretionaries, advancing 2.5%, and information technology, gaining 1.9%.

The TSX Venture Exchange backslid 0.49 points to 1,596.65, while the Nasdaq Canada index staggered 5.77 points to 749.16.

ON WALLSTREET

In New York, stocks tumbled Thursday, extending the recent selloff as investors continued to worry that Europe's debt problems will slow a bigger global economic recovery.

The Dow Jones industrial average slid 65.52 points to 10,802.60

The S&P 500 index stumbled 9.01 points to 1,156.89. The Nasdaq composite index fell back 21.74 points to 2,380.55.

Stocks have been sliding on and off for the last two weeks as investors mull the ramifications of the growing debt crisis in Europe. While European leaders have pledged to provide Greece with $146 billion U.S. in loans over the next three years, attempts by the nation to institute certain "austerity" measures to bring down the deficit have sparked riots and other violent outbursts.

Meanwhile, investors are concerned that the size of the bailout will make Europe less able to help Spain, Portugal and other debt-plagued nations. The so-called PIIGS also include Italy and Ireland.

The euro plunged to a fresh almost one-year low versus the dollar Thursday, pressuring dollar-traded oil prices. Oil prices and energy stocks were also vulnerable in the aftermath of the Gulf oil spill.

A report that showed weekly jobless claims dropped were also in focus.

The CBOE Volatility index, Wall Street's so-called fear gauge, spiked 5% to a fresh high of 26.26, topping levels not seen since February 8.

The Labor Department reported that the number of Americans filing first-time claims for unemployment benefits fell to 444,000 last week. That compared with the 440,000 estimated by economists and a revised 451,000 from the week before.

The report came one day before the government's closely watched monthly jobs report, which is forecast to show employers grew payrolls by 187,000 jobs in April, after a gain of 162,000 in March. The unemployment rate is expected to hold steady at 9.7%.

A report on U.S. productivity showed modest gains in the first quarter, rising 3.6%.

Freddie Mac reported an $8-billion U.S. quarterly loss Wednesday and said it needs another $10.6 billion U.S. from the federal government.

Treasury prices inched up sharply, lowering the yield on the 10-year note to 3.48% from Wednesday's 3.55%. Treasury prices and yields move in opposite directions.

The price of a barrel of oil fell 89 cents to $79.08 U.S.

Gold prices rocketed up $21 to $1,196 U.S. an ounce.