Utilities weigh heaviest
Apr. 28, 2010 (Baystreet.ca) --
Canadian stocks were extending their losses for a second session in mid-morning deals Wednesday, amid lingering worries over the euro-zone sovereign debt crisis.
The S&P/TSX Composite Index fell 58.39 points by noon to 12,088.35
Traders were also digesting a mixed bag of earnings from big names, including Barrick Gold and Husky Energy.
Among energy plays, Baytex Energy shed 2.31% and Niko Resources surrendered 2.04%.
Integrated energy company Husky Energy lost 2.57% even after reporting improved first quarter net earnings of $0.41 per share, compared to $0.39 per share in the same period of 2009. The company declared a quarterly dividend of $0.30 per share.
In the financial space, Canadian Western Bank dipped 2.28%. TD Bank and RBC lost nearly 1% each.
Among information technology stocks, blackberry maker Research In Motion shed 0.85% and Celestica wad down 2.11%.
Information technology services provider CGI Group said its second-quarter net earnings increased to $0.28 per share from $0.25 per share in the prior year period. Analysts were expecting the company to report earnings of $0.27 per share for the quarter. The stock was down 1.27%.
Communication and media company Rogers Communications slipped 1.40% even after reporting first-quarter net income of $0.64 per share, up from $0.49 per share reported last year.
Among gold stocks, Barrick Gold gained 2.12% after reporting adjusted first quarter net income of $0.75 per basic share, versus $0.34 per basic share in the last year quarter. Analysts were expecting the company to report earnings of $0.63 per share for the quarter.
Gold miner Goldcorp rose 0.82%.
Canadian stock market operator TMX Group added 1.23% after reporting higher first-quarter net income of $0.66 per share, up from $0.58 per share in the year-ago quarter. It has also declared a dividend of $0.38 on each common share outstanding.
Railways operator Canadian Pacific Railway gathered 3.20% after it said its first-quarter net income grew to $0.59 per share from $0.36 per share in the prior-year period.
The Canadian dollar regained 0.39 cents to 98.75 cents U.S.
ON BAYSTREET
Of the 14 TSX subgroups, all but four were in the red. Utilities weighed most heavily on the markets, falling 1.3%, while telecoms were down 1.1% and real-estate settled 1%.
The four gainers were by gold, up 2.7%, materials, ahead 1.6%, and global base metals, nipping ahead 0.1%.
The TSX Venture Exchange subsided 4.96 points to 1,653.53, while the Nasdaq Canada index settled 0.34 points to 786.32
ON WALLSTREET
In New York, stocks seesawed Wednesday, one day after a brutal selloff, as improved earnings and anticipation about a key announcement from the Federal Reserve vied with worries about Greece's debt troubles.
The Dow Jones industrial average fell back 2.35 points to 10,989.64.
The S&P 500 index remained above water by 0.49 points to 1,184.20. The Nasdaq composite index gave back 12.55 points to 2,458.92.
Investors also considered reports that Standard & Poor's cut Spain's debt rating one day after cutting Greece to junk and lowering Portugal's rating by two notches.
Stocks tumbled Tuesday after Standard & Poor's cut Greece's debt rating to junk and downgraded Portugal's debt rating, raising fears that a euro zone debt crisis could slow the global economic recovery. The Dow sank 213 points for its biggest one-day point slide in over nine months. The decline was equal to 1.9%. The S&P 500 fell 2.3% and the Nasdaq lost 2%.
Such concerns remained in place Wednesday, particularly after reports said that S&P cut Spain's debt rating. But worries about a broader impact were partly allayed by reports that Greece will likely receive a larger aid package than what was announced earlier in the month.
While Asian markets plunged overnight, European bourses managed to trim losses on the reports.
Greece is facing a May 19 deadline for refinancing about $11.4 billion U.S. in debt and investors are worried it could default. Although Greece has gotten the OK to access over $53 billion U.S. in loans from the European Union and the International Monetary Fund, the funds have not yet been made available.
But on Wednesday, Germany -- the largest of the 16 euro-zone countries -- said its portion of the initial loan package could be approved by the end of next week. Germany's perceived reluctance to ante up has added a layer of uncertainty to the proceedings. A Reuters report also said that the overall loan package could be increased to as much as $160 billion U.S. over three years.
Following the reports, the cost of insuring Greek debt dropped from record highs hit in the morning and the euro bounced back versus the dollar after falling to a one-year low.
Central bank policymakers were wrapping up their two-day policy meeting Wednesday with an announcement due at around 2:15 p.m. ET.
The Fed is expected to hold interest rates steady at historic lows near zero. As is usual, investors will be more interested in what the bankers say in the statement about the outlook for the economy and interest rates.
The Fed is expected to be fairly positive on its economic outlook. It may also provide more details about how it plans to continue unwinding programs put in place to prop up the economy during the financial crisis.
Another batch of better-than-expected quarterly results helped give stocks some support.
Roughly 82% of earnings have topped estimates. Should that figure hold up, it would be the highest percentage of companies beating expectations in Thomson's history.
Dow Chemical reported higher quarterly sales and earnings that topped estimates, as higher pricing boosted global sales. Shares gained almost 5%.
Defense contractors General Dynamics and Northrop Grumman both reported higher quarterly earnings that topped estimates. General Dynamics reported weaker revenue that missed forecasts, sending shares a bit lower. Northrop Grumman reported higher revenue that topped estimates and also lifted its 2010 profit outlook, sending shares higher.
AOL reported quarterly earnings and revenues that fell from a year ago and missed expectations, as the company contended with dwindling sales and a weakening subscriber base. Shares fell 12%.
With 48% of the S&P 500 having reported results, earnings are on track to have grown 52% from a year earlier and revenues 12%, according to the latest info from tracker Thomson Reuters.
Treasury prices fell, raising the yield on the 10-year note to 3.74% from 3.69% Tuesday. Prices had rallied Tuesday as stocks slumped, with investors seeking safety in government debt. Treasury prices and yields move in opposite directions.
The price of a barrel of oil gained nine cents to $82.53 U.S.
Gold prices gained $10 to $1,173 U.S. an ounce.
