Translate
Feb. 24, 2010 (Baystreet.ca) --
The Toronto stock market was little changed Wednesday amid mixed earnings news and reassurance from the head of the U.S. central bank that key interest rates will stay low to stimulate the economy.
The S&P/TSX composite index ended the day off 4.88 points to 11,521.83
Investors also took in news mid-afternoon that Toronto-based Brookfield Asset Management Inc. has agreed to invest $2.63 billion U.S. in General Growth Properties Inc., a U.S. shopping mall operator that has been operating under bankruptcy protection.
The announcement came on the heels of a hostile, $10-billion U.S. bid for General Growth from Simon Property Group, the largest U.S. owner of shopping malls. Brookfield shares were off 15 cents at $24.02.
The TSX has been on a roller-coaster ride this year, falling almost 8% from mid-to-late January, followed by a rise of about 6% over the first three weeks of February as investors try to gauge the strength of the economic rebound.
The tech sector made hay, with Research In Motion Ltd. ahead $1.74 to $73.94.
The base metals sector was also ahead with March copper in New York up two cents at $3.24 U.S. a pound.
Sherritt International Corp. shares climbed 23 cents to $6.96 as the miner reported a $48.3-million profit for the fourth quarter -- a big contrast to the $592.1-million loss reported a year earlier by the metals, coal and oil producer. Revenue was little-changed at just under $380 million
The energy sector rose as the U.S. Department of Energy reported that crude inventories in the U.S. shot up by three million barrels last week, much higher than the 1.9 million barrels economists had expected.
EnCana Corp. gained 16 cents to $34.00.
The gold sector was off as Centerra Gold Inc. said Tuesday it earned $140 million U.S. in its latest quarter. The Toronto-based company, which keeps its books in U.S. dollars, said revenue came in at $323.9 million U.S. Its shares rose a penny to $11.80.
The consumer staples sector declined, with Maple Leaf Foods Inc. shares off 30 cents to $10.90 after the company reported fourth-quarter sales dipped slightly to $1.32 billion. The company had net income of $21.9 million in the quarter, compared with a loss of $14.6 million a year earlier.
Meanwhile, shares in the leading supplier of store-brand carbonated beverages, Cott Corp. backtracked two cents to $7.93 after it reported quarterly net income of $14 million U.S., a turnaround from the $12.1-million U.S. loss it suffered a year earlier. Revenue improved by 3.9% to $386 million U.S.
In other earnings news, Thomson Reuters Inc. announced Wednesday that it is raising its annual dividend by four cents to $1.16 a share. The information services company said net income fell to $182 million U.S. in the fourth quarter, down from $566 million a year earlier.
Overall revenue fell slightly to $3.36 billion U.S. from $3.4 billion U.S. and its shares declined 66 cents to $36.40.
Shares in heavy equipment dealer Finning International Inc. slipped 58 cents to $17.47 after the company had reported Tuesday that its earnings declined to $16.3 million in its latest quarter from $44.6 million a year earlier, while revenue fell 28%. The Vancouver-based company said it was seeing signs of recovery.
The Canadian dollar was ahead 0.16 cents to 94.85 cents U.S.
ON BAYSTREET
Of 14 TSX subgroups, nine went south. Consumer staples and materials stock fell 0.8% each, while gold slid 0.6%.
Information technology led the five gainers, ahead 0.6%, while global base metals picked up 0.3% and financials sneaked ahead 0.2%.
The TSX Venture Exchange stumbled 0.58 points to 1,519.41, while the Nasdaq Canada index regained 14.81 points over Tuesday to 745.94.
ON WALLSTREET
In New York, equities rallied Wednesday after Federal Reserve Chairman Ben Bernanke again pledged to keep interest rates low for the foreseeable future, reassuring investors worried about the outlook for the economy.
The Dow Jones industrial average was ahead 91.75 points to end the session at 10,374.16. The S&P 500 index tacked on 10.64 points to 1,105.24, and the Nasdaq composite added 22.46 points to 2,235.90.
Stocks posted slim gains in the early going, lost some steam after a worse-than-expected new home sales report and then turned higher again after the Fed chief began speaking. The gains continued throughout the session.
The weaker dollar lifted dollar-traded commodities and big corporations that do a lot of business overseas and therefore benefit from a weaker greenback. Financial and technology shares were also on the rise.
Investors were digging back in after a two-session decline. That retreat occurred as a lackluster forecast on consumer spending and a plunge in a key measure of consumer confidence amplified concerns about the strength of the recovery.
Stocks managed to advance in the previous two weeks as investors focused on the positives in the company and economic news, after a four-week rout.
In his first day on Capitol Hill, Bernanke told the House Financial Services Committee that while the economic recovery is moving along, the jobs market remains weak. Against this backdrop, the Fed is unlikely to lift the fed funds rate, the key overnight bank lending rate, anytime soon.
Bernanke was testifying before the House Wednesday and was scheduled to appear before the Senate Thursday.
Investors are looking for more on how and when the central bank plans to unwind emergency programs that were put in place at the height of the financial crisis, particularly after the Fed boosted the discount rate last week.
The Fed boosted the discount rate -- the emergency bank lending rate -- by a quarter-percentage point to 0.75%. It was a largely symbolic move in a rate that is rarely used by banks, but it was also the first rise in rates in over a year and the first move in any direction for rates in over two years.
The move was another step toward returning monetary policy to a so-called normalized state after the extraordinary measures of the last two years.
In his early statements, Bernanke implied that the Fed will at some point need to raise the fed funds rate, the key bank lending rate, but that such a move is not likely to happen soon, considering the still moderate pace of recovery.
Big financial firms JPMorgan Chase, Morgan Stanley and Bank of America all rallied, along with regional banks such as Keycorp, Fifth Third Bancorp and Regions Financial.
In deal news, printing services firm R.R. Donnelley said it is buying Bowne & Co., a printer of corporate regulatory filings, in a deal worth $481 million U.S. The $11.50 U.S. per share all-cash deal values the stock at more than 60% over Friday's closing prices.
Shares of Bowne & Co. rallied 60% in unusually active New York Stock Exchange trading, while RR Donnelley shares gained 3%.
Shares of STEC plunged 24% in unusually active Nasdaq trading after the company issued a 2010 profit forecast late Tuesday that disappointed investors. The computer data storage firm forecast revenue in a range that is more than 50% below analysts' forecasts and said it would report a quarterly loss, versus current forecasts for a profit.
JPMorgan Chase led the list of analysts downgrading or cutting forecasts on the company on Wednesday.
Toyota management faced Congressional scrutiny for the second straight day, with company president Akio Toyoda speaking before the House Oversight Committee regarding the recall of millions of vehicles over safety issues.
Toyoda, speaking through a translator, apologized for the safety problems that led to deaths, injuries and the eventual recall of more than 8 million vehicles with brake problems.
The company said it is creating a system that will make it easier for customer complaints to be addressed and that it is forming a "quality advisory group" to seek input on safety and quality measures.
On Tuesday, witnesses argued that the problems with the brakes could be tied to the vehicles' electronic throttle system, but Toyoda disputed that.
The Senate approved a $15-billion U.S. jobs creation bill that gives businesses tax breaks for hiring the unemployed and extends tax breaks that encourage companies to buy equipment.
On the economic front, sales of new homes plunged to a record low in January in the United States, underscoring the formidable challenges facing the housing industry as it tries to recover from the worst slump in decades.
The Commerce Department reported Wednesday that new home sales dropped 11.2% last month to a seasonally adjusted annual sales pace of 309,000 units, the lowest level on records going back nearly a half century. The big drop was a surprise to economists who had expected sales would rebound to an annual rate of 360,000 units.
Treasury prices crept up, lowering the yield on the 10-year note to 3.69% from 3.67% late Tuesday. Treasury prices and yields move in opposite directions.
The price of a barrel of oil gained $1.31 to $80.17 U.S.
Gold prices gave back six dollars to $1,101 U.S.