Stocks in Toronto eked out a modest gain as trading approached mid-session Monday, buoyed by stronger-than-expected economic data on durable goods orders in the U.S.
The TSX composite index rose 41 points to 12,858, shrugging off weakness in tech darling Research In Motion Ltd. ahead of a much anticipated launch on Wednesday of its Blackberry 10 new phone model. RIM shares were down about 5 per cent amid reports that China's Lenovo Group Ltd., which last week was quoted by Bloomberg News as saying it might want to buy RIM, is now downplaying those comments. Lenovo said today the comments, from CFO Wong Wai Ming, was only meant to say that the company was open to all acquisition options, rather than specifically targeting the BlackBerry maker.
Equities in New York were mixed, with the Dow Jones industrial average and the S&P-500 nearly unchanged, while the technology heavy Nasdaq advanced 11 points to 3,160.
The news of better economic performance pushed the yield on 10-year U.S. Treasurys above 2 per cent for the first time since April 2012, although the bonds fell below that psychologically important level in later trading. Rising bond yields suggest investors are growing more confident about the economic outlook and are shaking off some of the worries that fiscal wrangling in the U.S. over the country’s deficit has been damaging consumer and business confidence.
That view was bolstered by December U.S. orders for durable goods, or those designed to last more than three years, which soared 4.6 per cent, well above market expectations of a 2 per cent jump.
The figure “provides reason for optimism that recent improvements in business investment will be sustained despite some ongoing fiscal uncertainty surrounding current debt ceiling and budget negotiations,” Nathan Janzen, economist at the Royal Bank of Canada, wrote in a note to clients.
Turning to individual stocks, TransCanada Corp. advanced about 1 per cent. The Globe and Mail reported today that New Brunswick premier David Alward would welcome a proposed $5-billion pipeline to bring Alberta oil to Eastern Canada. Transcanada would be a major beneficiary of such a project.
Agrium CEO Mike Wilson told analysts that breaking up the company’s wholesale and retail fertilizer operations, as proposed by a major hedge fund shareholder, would destroy shareholder value.
The price for gold bullion edged lower, falling $5.50 U.S. to $1654 an ounce, taking shares of most miners down a notch.
In New York, Caterpillar issued an outlook for the global economy that investors deemed positive, sending shares of the construction equipment maker up 2 per cent.