TSX keeps streak alive

Discretionaries lead the pack

Apr. 26, 2010 (Baystreet.ca) --

Consumer discretionaries and industrials led Toronto's main index to a fresh 18-month high Monday, countering weakness in IT, utilities and consumer staples sectors, as traders geared up for a busy week on the corporate earnings front. The S&P/TSX Composite Index closed at 12,280.97, up 41.33 points or 0.34%, extending its winning streak to a sixth session. The industrials sector added strength, as heavy-equipment maker Finning International rose 3.8% to $19.73 and engineering firm SNC-Lavalin Group gained 2% to $52.40. Despite a pullback in oil prices, energy stocks edged higher. Encana gathered 1.3% to $33.08, Imperial Oil added 1.1% to $43.50 and Crew Energy advanced 3.7% to $18.08. The Canadian dollar slid 0.2 cents to just below parity with the American dollar, at 99.87 cents. ON BAYSTREET Of the 14 TSX subgroups, all but four were positive on the day. Consumer discretionaries lead the field, gaining 1%, followed by industrials, advancing 0.8% and metals and mining stocks, gaining 0.5%. Consumer staples and utilities weighed down the four stock groups that lost, each group giving back 0.4%, while information technology was just 0.1% in the red. The TSX Venture Exchange accumulated 1.93 points to 1672.16, while the Nasdaq Canada index reversed course and picked up 13.01 points to 803.08 ON WALLSTREET In New York, blue chips managed to eke out a fresh 19-month high Monday on Caterpillar's strong earnings, but a selloff in financials hit the broader market at the start of a busy week on Wall Street. The Dow Jones industrial average gained only 0.75 points to close at 11,205.03. The S&P 500 index faded 5.23 points to 1,212.05. The Nasdaq composite index skidded on the day 7.20 points to 2,522.95. Stocks seesawed through the session as investors welcomed Caterpillar's earnings and forecast but showed reluctance at the start of a busy week. Financial concerns continued to drag on the market. Stocks gained Friday after a surprisingly strong new-home sales report, with the Dow, Nasdaq and S&P 500 all gaining on the week as well. The Dow has now gained eight weeks in a row, the longest wining streak since January 2004. Although there are no economic reports due Monday, the pace picks up later in the week. The Fed's two-day policy meeting concludes Wednesday, with a statement due in the afternoon, while reports on jobless claims, consumer confidence and gross domestic product are also on tap. While the trend for the market remains up, there are still headwinds, including any fallout from Goldman Sachs' fraud charge, the debate over financial reform and Greece's lingering debt issues. Goldman Sachs shares fell ahead of a Senate hearing Tuesday aimed at investigating the role investment banks played in the 2008 financial crisis. Goldman CEO Lloyd Blankfein, Fabrice Tourre, the only Goldman employee named in the SEC's fraud charge, and other Goldman employees will be among those testifying. E-mails released Monday showed that Tourre -- who helped create a bond deal tied to subprime mortgages that regulators say defrauded investors -- knew the complex deals were bunk. The federal government said it will sell up to 1.5 billion shares in Citigroup, in its latest move toward withdrawing some of the support for big banks it put in place during the height of the financial crisis. The sales are equivalent to about one-fifth of the government's ownership stake and would reduce its holdings to roughly 22% of the company. Shares plunged 5%. Other bank shares fell too, dragging the KBW Bank sector index down almost 3%. Heavy-machinery maker Caterpillar reported higher quarterly earnings that beat estimates on weaker revenue that missed estimates. The company said that the economic outlook is improving, but that it is cutting its outlook for housing starts by 20% due to the weak labour market. The Dow component also boosted its 2010 profit forecast. Shares gained 5%. Whirlpool reported higher quarterly sales and earnings that beat estimates due to stronger sales of its appliances both domestically and abroad. The company also reported a stronger 2008 profit. Shares gained 14%. With roughly 34% of the S&P 500 having reported results, earnings are currently on track to have risen 50% from a year ago, while revenues are on track to have risen 11%, according to tracker Thomson Reuters. So far, about 83% of earnings and 81% of revenues have topped estimates. Hertz said it will buy Dollar Thrifty in a $1.2-billion-U.S. cash-and-stock deal that combines the two car rental companies. Treasury prices lost ground toward the end of the day, raising the yield on the 10-year note back to Friday's 3.82%. Treasury prices and yields move in opposite directions. The price of a barrel of oil slipped $1.27 to $83.85 U.S. Gold prices were flat at $1,154 U.S. an ounce.