The Toronto Stock Market stayed relatively flat Tuesday as it was dragged down by dropping commodity prices and earnings reports from a number of big-name companies, including food distributor George Weston Limited and airline WestJet Airlines Ltd.
The S&P/TSX composite index was down 0.7 points at 12,474.52, while the Canadian dollar climbed 0.18 of a cent to $99.50 US.
The resource-heavy TSX initially opened lower, then jumped back and forth between positive and negative territory throughout the morning. The TSX Venture Exchange was down 3.87 points to 963.51.
Analyst Kash Pashootam of Raymond James said a downward trend in commodities looks like it’s here to stay – at least for a while.
“We’re seeing a continuation of the slowdown in growth in the commodity space,” he said from Ottawa. “We’re in the late innings of the commodities cycle, and the market is looking for conviction before commodity prices go up.”
Pashootam says the markets are also watching for several major reports due out of China this week, which will indicate how the world’s second-largest economy is doing.
If the reports are positive it will likely drive up commodities. But if, as expected, they indicate a continuing slowdown, that will maintain a damper on prices.
U.S. markets were positive, with the Dow Jones industrials up 39.21 points at 15,008.10 – again hitting the 15,000 mark after reaching that threshold for the first time on Friday. That was also the case with the S&P 500, which advanced 3.63 points to 1,621.13 after climbing above 1,600 for the first time on Friday as well.
Both indexes hit their record highs following the release of better-than-expected job numbers in the U.S.
The Nasdaq was up 6.55 points to 3,399.52.
Meanwhile, commodity prices appeared to weaken, with June gold bullion falling $22.60 to $1,445.40 an ounce and July copper down two cents at $3.29 a pound.
The June crude contract on the New York Mercantile Exchange faded 68 cents to US$95.58 a barrel.
In earnings news, Canada’s second-largest airline reported its “best ever” quarter. Calgary-based WestJet says its first-quarter net income rose by a third to $91.1-million or 68 cents per share from $68.3-million or 49 cents per share in the same 2012 period. Total revenue was up 8.6 per cent at $967.2-million from $891-million a year ago. However, it shares were down $1.43 at $23.29.
Food processor and distributor giant George Weston Ltd. reported an almost 34 per cent increase in is first-quarter net earnings, due to foreign currency translation and amendments to its defined benefit pension plan among other things.
The majority owner of supermarket chain Loblaw Companies Ltd and Weston Foods says net income attributable to common shareholders was $162-million or $1.19 per share. That was up 33.9 per cent from $121-million or 87 cents per share in the same period a year ago. Sales improved 3.7 per cent to $7.49-billion from $7.22-billion. However, the company’s adjusted earnings missed analyst expectations by two cents per share and the stock was down 36 cents at $80.73.
Yellow Media Ltd. reported a big turnaround in its first-quarter bottom line compared with a year ago when the publisher of print and digital media directories took a massive $2.9-billion goodwill impairment. Its net income in the three months ended March 31 was $53.5-million or $1.91 per share, compared with a net loss of $2.87-billion or $102.93 per share in the same 2012 period. Its stock jumped ahead 67 cents, or about 7 per cent, to $9.95.
But it wasn’t all positive news from the corporate sector.
Oil firm Husky Energy said its first-quarter profit was down from a year ago, as the price for its heavy crude oil came under pressure. The company said it earned $535-million or 54 cents per diluted share, down from $591-million or 60 cents per diluted share a year ago. The market reacted by driving down shares 19 cents to $29.73.
Brewer Molson Coors says net profit plummeted by more than half to US$36.5-million in the first quarter. The decrease was largely attributable to to weakness in core North American markets and additional costs involving an acquisition in central Europe, which boosted net sales by nearly 20 per cent to US$828.5-million. The underlying pre-tax income of its Canadian business decreased 18.9 per cent to US$37.3-million on lower beer volumes.
Overseas, Japan’s Nikkei index hit above 14,000 for the first time since 2008 in its first day of trading since the market closed for the Golden Week holiday. The Nikkei 225 stock average climbed 3.6 per cent to 14,180.24.
Britian’s FTSE 100 index was up 0.4 per cent at 6,550 while the CAC-40 in France rose 0.6 per cent higher to 3,931. Germany’s DAX was trading 0.6 per cent higher at a record 8,191.
Hong Kong’s Hang Seng rose 0.6 per cent to 23,047.09, while South Korea’s Kospi fell 0.4 per cent to 1,954.49.
Also, the Reserve Bank of Australia lowered its official interest rate by a quarter percentage point to 2.75 per cent amid some signs the economy is coming off the boil as the Australian dollar rises. Following the reduction, the Aussie dollar fell 0.9 per cent to US$1.0169 and the S&P/ASX 200 was still off 0.2 per cent at 5,143.70.