Financials weigh on TSX

Feb. 10, 2009 (Baystreet.ca) --

12:26 pm EST Markets in Toronto staged a slight comeback, after triple-digit losses in the morning.

The S&P TSX Composite Index was still 29.25 points below Wednesday's close by midday Thursday to 8,708.64, misfortunes sustained by the financial and energy sectors the chief culprits.

The financial sector was down, with Royal Bank down 56 cents to $29.79.

Shares in Sunlife Financial Inc. declined 91 cents to $22.09 after it said quarterly earnings slid to $129 million or 23 cents per share, down from year-earlier profits of $555 million or 97 cents per share. Quarterly revenue came in at $4.7 billion, down from $5.4 billion reported during the same period in 2007.

Full-year earnings shrank to $785 million or $1.37 per share from 2007 profits of $2.2 billion or $3.85 per share.

Manulife Financial Corp. lost $1.87 billion in the fourth quarter - even worse than the $1.5-billion loss estimated in early December. The big life insurer said Thursday its full-year earnings dropped to $517 million, down 88% from $4.3 billion in 2007 and its shares moved 58 cents lower to $18.78.

Canaccord Capital Inc. shares fell 20 cents to $4.10 as the company turned in a $62.4-million net loss in its fiscal third quarter, including a writedown of its U.S. capital markets business and costs related to a staff reduction last year. Revenue for the three months ended Dec. 31, was $87.2 million, down 52.4% from the same quarter a year ago.

The TSX energy sector lost as shares in Nexen Inc. were down 79 cents to $16.65 after the company recorded a quarterly loss of $181 million, reversing year-earlier profits of $194 million.

Nexen said quarterly results were hurt by approximately $318 million in impairment charges related to its properties in the North Sea and the Gulf of Mexico.

EnCana Corp. reported that fourth-quarter earnings slipped to US$1.07 billion from $1.08 billion recorded a year ago. Earnings per share remained flat at $1.43.

Quarterly cash flow fell to $1.3 billion from year-earlier levels of $1.9 billion and its shares declined 42 cents to $52.70.

The telecom sector was a bright spot, with Rogers Communications ahead 91 cents to $34.76.

The base metals sector pulled ahead with Teck Cominco Ltd. up 20 cents to $5.15.

Gildan Activewear Inc. shares plunged $2.32 or 18.5% to $10.23 after it reported it earned $4.3 million U.S. in its most recent quarter as sales sagged 26.5% from a year earlier to $184 million U.S.

The sock and T-shirt maker, which keeps its accounts in U.S. dollars, said the profit in its seasonally slow first quarter compared with a year-ago profit of $27.9 million.

Yellow Pages Income Fund units rose 22 cents to $5.44 as the company said that fourth-quarter profit was down to $100 million from $157 million a year ago on higher income tax provisions and restructuring charges. Revenues rose to $425.6 million from $412.6 million while full-year profit came in at $509.2 million, including restructuring and special charges, compared to $527.7 million in 2007.

The Canadian dollar was down 0.18 cents to 80.34 cents U.S.

BAYSTREET Decliners nudged out the gainers seven to six, among the 13 TSX sub-groups.. Financials still suffered the most among the sectors in negative country, down 2.5%, followed by health-care, industrials and energy stocks, each off 0.7%.

Metals and mining led the groups making gains, ahead 2.3%, followed by telecoms, ahead 1.5% and consumer staples, up 0.6%.

The TSX Venture Exchange picked up 1.26 points to 912.52 while the NASDAQ Canada index advanced 8.02 points, to 503.55

ON WALLSTREET

The Dow Jones industrials index was still in the red by noon, 102.90 points to 7,836.63. The Standard & Poor's 500 index skidded 9.33 points to 824,41, while the NASDAQ composite index was still 1.27 points to the bad, at 1,528.83.

In economic news, U.S. retail sales jumped 1% in January, reversing a six-month declining trend and defying economists' expectations by posting the biggest increase in 14 months.

The U.S. Commerce Department says January retail sales rose 1% from December after having fallen for six straight months. Economists had expected January sales to show a drop of 0.8%.

The January report shows strong increases in sales of automobiles and in general merchandise stores though sales by department stores, carrying fewer varieties of items, posted a decline.

Washington also released its weekly report on initial unemployment filings, showing 623,000 claims filed in the week ended Feb. 7. This is down from the revised tally of 631,000 the prior week.

Economists had expected claims to have dropped to 610,000 in the week ended Feb. 7.

Investors are still juggling concerns about the U.S. economy even as the Congress struck a deal on a $789-billion U.S. economic stimulus plan.

Investors are hoping the stimulus plan's mix of spending and tax cuts will be able to help revive an economy mired in its worst recession in generations.

The House of Representatives could vote on the measure as soon as Thursday, though Friday seemed more likely.

But investors are still disappointed with the lack of details contained in Tuesday's announcement on the government's latest plans to overhaul the second half of its $700-billion U.S. financial rescue fund.

In company news, homebuilder Toll Brothers warned late Wednesday that revenue from building homes will decline by more than half for the quarter ended Jan. 31. The company said home production is at its lowest level in 50 years.

Alcoa announced the sale of its stake in mining company Rio Tinto to Aluminum Corp. of China for $1 billion U.S., well above its $300-million current value.

Big bank shares declined Thursday, including American Express, Bank of America, Citigroup and Wells Fargo. The Dow's only gainer was Coca-Cola, which rallied after it reported a better-than-expected quarterly profit, thanks to strong global sales.

Treasury prices rose, lowering the yield on the benchmark 10-year note to 2.76% from 2.79% Wednesday.

The March crude contract in New York moved down 90 cents to $35.04 U.S. a barrel.

The April bullion contract in New York was up $1 to $945.50 U.S. an ounce.