Stocks on the march

TSX rides gains for gold, materials

Apr. 30, 2010 (Baystreet.ca) --

Bay Street stocks were hovering in positive territory in mid-morning deals Friday, amid firm commodities prices and on hopes for a quicker resolution for the Greece debt crisis by the E.U.

The S&P/TSX composite index leaped 79.44 points by noon to 12,279.76

Traders took cues from today's GDP report, which revealed that the Canadian economy grew roughly in line with expectations in February. Also, quarterly GDP data from south of the border helped lift sentiment.

The Global Gold Index surged, with Barrick Gold and Goldcorp adding over 2% each. Iamgold gained 5.5%.

Gold producer Agnico-Eagle Mines rose 2.41% even after reporting lower first quarter net income of $0.14 per share, compared to $0.35 per share in the same quarter last year. Analysts were expecting the company to post net income of $0.29 per share in the quarter.

The company attributed the reduction in income to a non-cash foreign currency translation loss of $0.06 per share, and a non-cash stock-based compensation expense of $0.11 per share in the quarter.

Among energy plays, Suncor Energy was up 2.11% and Imperial Oil moved up 0.72%.

In the health-care space, SXC Health Solutions gathered 3.33%.

Distribution utility company Fortis Inc. edged up 0.76%. The company said its first-quarter net earnings increased to $0.56 per common share from $0.52 per common share in the prior year quarter.

In addition, the company said that its significant capital program, which is expected to be about $1.1 billion in 2010 and approach $5 billion over the five-year period from 2010 through 2014, should drive growth in earnings and dividends.

Media and entertainment company Corus Entertainment said it would sell the Corus Quebec radio stations to COGECO Inc., a telecommunication services providing company, in a transaction valued around $80 million. Both the stocks gained around 0.70% each.

Meanwhile, information technology shares were under pressure, with Open Text plummeting 7.67%.

The company reported lower third-quarter net income of $0.23 per share, compared to $0.41 per share in the year ago period. Analysts were expecting the company to record $0.74 per share for the quarter.

Paper manufacturer Domtar Corp. shed 2.51%. The company swung to profit in first quarter, reporting net earnings of $1.34 per share, compared to a net loss of $1.05 per share last year.

Logistic business solutions provider Canadian Utilities eased 0.61% after reporting first-quarter earnings of $1.18 per share compared to $1.16 per share for the quarter in 2009.

Cash logistic services provider Garda World Security surrendered nearly 3% despite reporting a narrower full-year net loss of $1.12 per basic share from the restated $3.12 per basic share last year.

In economic news, Statistics Canada said the country's real gross domestic product increased 0.3% in February, largely helped by growth in manufacturing and mining. The manufacturing sector grew 1.2% and the mining sector increased 0.4% in February.

In another report, the agency said the Industrial Product Price Index (IPPI) declined 0.4% and the Raw Materials Price Index rose 0.8% in March The IPPI declined in March after advancing in the past four months. The agency noted that the 3.3% gain in the value of the Canadian dollar versus the U.S. dollar had impacted the IPPI.

The Canadian dollar fell back 0.69 cents to 98.76 cents U.S.

ON BAYSTREET

The 14 TSX subgroups were evenly split between gainers and losers by midday. Gold led the winners, ahead 3.2%, followed by materials, up 2.4% and health-care issues, moving forward 1.8%.

The seven losing groups were weighed by IT stocks, off 2.1%, global base metals, sliding 0.8%, and consumer staples, down 0.6%.

The TSX Venture Exchange added 12.43 points to 1,672.40, while the Nasdaq Canada index backtracked 2.09 points to 795.53

ON WALLSTREET

In New York, stocks turned lower Friday as investors looked past strong readings on GDP, consumer sentiment and manufacturing amid lingering worries about Greece's debt problems and reports that Goldman Sachs is facing a criminal probe.

The Dow Jones industrial average was still in negative country, by 6.12 points at lunch time to 11,161.20

The S&P 500 index slipped 2.83 points to 1,203.95. The Nasdaq composite index gave back 11.25 points to 2,500.67.

Stocks had seesawed in the early going, but turned lower in mid-morning, with Goldman Sachs falling on reports the company is the target of a criminal investigation by federal prosecutors.

Ratings agency Standard & Poor's downgraded the stock to "sell." Bank of America/Merrill Lynch also reportedly downgraded it to "neutral" from "buy" before the start of trading.

Shares fell 4.5% in morning trading.

Strong quarterly profit reports propelled markets Thursday, with the Dow, S&P 500 and Nasdaq gaining over 1% each. But investors showed caution Friday at the end of a choppy week in which worries that Greece might default on its debt sent the major indexes tumbling by more than 2% on Tuesday.

Stocks are currently posting gains for the month of April, but the Dow is in danger of breaking its eight-week winning streak, its longest up stretch in six years. The Nasdaq has also risen for the last 8 weeks and the S&P 500 for seven of the last eight weeks.

The U.S. economy grew at a 3.2% annual rate in the first quarter, the Commerce Department reported Friday. It was short of the 3.3% economists were predicting, according to a Briefing.com survey, but was still the third quarter in a row that U.S. gross domestic product grew.

GDP rose at a 5.6% annualized rate in the fourth quarter of 2009.

Elsewhere on the economic front, the University of Michigan's final reading on April consumer sentiment was revised up to 72.2 from 69.5, beating forecasts for a revision to 71.

The Chicago PMI, a regional reading on manufacturing, rose to 63.8 in April from 58.8 in March, versus forecasts for a rise to 59.9.

Concerning deals, Continental and UAL Corp.'s United Airlines are in focus after the Wall Street Journal reported that the two are close to a merger deal. Continental shares rose 3% and UAL shares rose 5% in morning trading.

Treasury prices gained on the day, lowering the yield on the 10-year note to 3.69% from Thursday's 3.73%. Treasury prices and yields move in opposite directions.

The price of a barrel of oil gained 88 cents to $86.05 U.S.

Gold prices tacked on $12 to $1,181 U.S. an ounce.