The Toronto stock market was flat at midday Thursday amid well-received earnings reports from the resource sector and mainly lower commodity prices.
The S&P/TSX composite index inched up 3.33 points to 12,675.63 amid earnings from Teck Resources (TSX:TCK.B) and Husky Energy (TSX:HSE) that beat expectations. But global fertilizer producer PotashCorp (TSX:POT) weighed on the TSX as it missed expectations and lowered its 2013 profit forecast.
The Canadian dollar rose 0.31 of a cent to 97.25 cents US.
U.S. indexes were lower amid earnings from General Motors and Facebook that beat expectations and the Dow Jones industrials lost 74.02 points to 15,468.22.
The Nasdaq gained 3.36 points to 3,582.96 and the S&P 500 index gave back 4.24 points to 1,681.7.
Teck (TSX:TCK.B) reported a second-quarter adjusted profit of $197 million or 34 cents a share, down sharply from $398 million of profit a year ago but three cents above estimates. One of Canada’s largest coal producers and a major miner of copper, zinc and other commodities, Teck said it’s increasing cost-reduction efforts to deal with lower prices for its products. Its shares advanced 78 cents to $24.47.
“Obviously, they can beat expectations that have been lowered,” said Allan Small, senior adviser at DWM Securities, who owns Teck shares, “(but) it’s going to be a little while yet before we see Teck doing well.”
He pointed out that “many in the investment world are not expecting much out of the base metal miners”, in large measure because slowing growth in China and falling demand.
But he also noted that a rising U.S. dollar is also depressing prices and “as the currency gets more expensive, you tend to buy less.”
A stronger greenback makes it more expensive for holders of other currencies to buy oil and metals which are denominated in U.S. dollars.
Husky Energy (TSX:HSE) gained 40 cents to $29.98 as it said quarterly profit rose 40 per cent from a year ago to $605 million or 59 cents a share. Earnings ex-items were 62 cents, five cents better than estimates.
Goldcorp Inc. (TSX:G) reported a US$1.93-billion net loss in the second quarter, as it was hit by a massive writedown of its Penasquito mine in Mexico due to the falling price of gold and its impact on the project’s exploration potential.
The Vancouver-based mining company says it would have been profitable in the second quarter without the writedown, but its adjusted earnings were still down from last year and missed analyst estimates. Its shares lost 43 cents to $28.81.
Shares in Potash Corp. (TSX:POT) fell $1.10 to $38.07 after it cut its profit estimate for the current year and reported a quarterly profit of of $643 million, or 73 cents per diluted share, up from $522 million, or 60 cents per share a year ago. The results missed estimates for a profit of 79 cents per share.
In the U.S., General Motors says second-quarter net income fell 16 per to $1.26 billion or 75 cents a share cent as slowing international profits and losses in Europe offset strong North American earnings. Still, GM soundly beat Wall Street expectations. Excluding one-time items, it made 84 cents per share. Analysts polled by FactSet expected 75 cents.
Revenue was up four per cent to just over $39 billion, beating Wall Street’s estimate of $37.7 billion and GM shares lost early momentum and headed down 28 cents to $36.86.
Facebook shares rocketed up 24.78 per cent to $33.08 after the social network company said that it earned $333 million, or 13 cents per share, in the April-June period, up from a loss of $157 million, or eight cents per share, a year ago. Adjusted earnings were $488 million, or 19 cents per share, above the 14 cents that analysts were expecting. Facebook’s revenue grew 53 per cent to $1.81 billion, well above the $1.62 million that analysts were expecting.
Mobile revenue was $655.6 million, or 41 per cent of the quarter’s total advertising revenue of $1.6 billion.
Commodities were mainly lower with the September crude contract on the New York Mercantile Exchange down 37 cents to US$105.02. That followed a slide of almost $2 on Wednesday as traders weighed weak Chinese manufacturing data against a slightly bigger than expected drop in U.S. crude inventories. The energy sector was up 0.22 per cent. Cenovus Energy (TSX:CVE) was down 15 cents to $30.34.
The Teck results helped push the base metals sector up 0.6 per cent while September copper was unchanged at US$3.18 a pound. Elsewhere in the sector, Turquoise Hill Resources (TSX:TRQ) rose seven cents to $5.39.
The gold sector was ahead 1.6 per cent with August bullion $6.90 higher to US$1,326.40 an ounce. Iamgold (TSX:IMG) gained 18 cents to C$5.50.
In other corporate news, BlackBerry (TSX:BB) is laying off 250 workers in its new product testing facility in Waterloo, Ont. Its shares slipped two cents to $9.28.
On the economic front, U.S. durable goods orders for June surged 4.2 per cent, after running up 3.7 per cent in May. The showing as far ahead of economist expectations for a 1.1 per cent rise.
However, the strong gain in June was driven completely by the transportation sector. Ex-transport, orders were flat on the month
European bourses were lower as London’s FTSE 100 index lost 0.37 per cent, Frankfurt’s DAX fell 0.91 per cent and the Paris CAC 40 was down 0.28 per cent.