North American markets were relatively flat Friday, despite having lots of data to take cues from, as the release of corporate earnings reports continued and economic indicators come in from both Canada and China.
The S&P/TSX composite index dipped 22.94 points to 12,529.98. The Canadian dollar was up 0.01 of a cent to 96.87 cents US.
On Wall Street, the U.S. indexes saw a small bounce-back after trading in negative territory in the premarket. The Dow Jones industrials index climbed 4.47 points to 15,502.79, the Nasdaq was ahead 8.17 points to 3,677.29, while the S&P had an uptick of 1.40 points to 1,698.88.
An onslaught of data from China, the world’s second-largest economy, was not enough to lift the markets, as figures overnight showed that Chinese inflation in July was steady at an annual rate of 2.7 per cent — slightly below an expected modest increase to 2.8 per cent.
Industrial production rose 9.7 per cent in the year to June, ahead of expectations for a nine per cent increase and retail sales grew 13.2 per cent in July from a year earlier, slightly slower than June’s growth rate.
Overall, analysts said the figures added weight to the argument that the recent soft patch in the economic powerhouse may have come to an end. However, market reaction was fairly muted, as stocks had rallied already on Thursday after strong Chinese trade numbers.
A double-dose of economic news was also released in Canada, potentially indicating that the economy wasn’t faring at a pace that some have come to expect.
Statistics Canada says a surprisingly high 39,400 net jobs were lost last month, with public sector workers and youth taking on the biggest share of the losses. It was the second consecutive month that Canada’s economy lost jobs and lifted.
The official unemployment rate is now 7.2 per cent, one-tenth of a point higher than in June.
The consensus from economists had been that Canada would have added 10,000 jobs in July.
Meanwhile, the Canada Mortgage and Housing Corp. says total housing starts continued to be relatively stable in July.
The federal agency estimates there were 17,993 actual starts in July which, extrapolated over 12 months, gives a seasonally adjusted annual rate of 192,853 starts. That was slightly down from June’s adjusted annual rate of 193,797 starts.
On the TSX, BlackBerry (TSX:BB) shares rose nearly seven per cent, or 61 cents, on news that the Canadian smartphone-maker’s chief executive officer and board of directors are warming to the idea of taking the company private.
The reports from Reuters said no decision was imminent and BlackBerry issued a brief statement saying it doesn’t comment on rumours or speculation. The Toronto-listed shares climbed to $10.12 in mid-morning trading.
Meanwhile, autoparts giant Magna International Inc. (TSX:MG) reported a US$415 million profit and record-high second-quarter sales, which were up 16 per cent from the same time last year and well above analyst estimates.
It says it currently expects between $33.3 billion and $34.7 billion of sales in 2013 — about $700 million higher than Magna’s outlook in May when its first-quarter results were issued. Magna shares were ahead $2.15 or nearly three per cent to $82.30.
Brookfield Asset Management Inc. (TSX:BAM.A) is also reporting US$802 million of net income and US$464 million of funds from operations for common shareholders in the second quarter.
Both results were more than double the levels a year earlier, when the Toronto-based asset manager had US$379 million of net income and $159 million of funds from operations.
On a per-share basis, net income was 31 cents and funds from operations was 68 cents in the three months ended June 30, up from 17 cents and 20 cents respectively in the second quarter of 2012.
Brookfield is one of Canada’s largest conglomerates, with numerous publicly traded subsidiaries and investments primarily focused on real estate, power generation and natural resources, particularly in the forestry sector. Despite the positive earnings, its shares dipped nine cents to $38.49.
Dorel Industries Inc. (TSX: DII.B) widely missed expectations as the baby products and bike manufacturer’s second-quarter net income plummeted to US$13.2 million. The Montreal-based company said revenues dropped five per cent due to poor weather, discounting and continuing difficult economic conditions.
On the commodities front, December bullion dropped $3.10 to US$1,306.80 an ounce.
The September crude contract on the New York Mercantile Exchange moved up $1.39 cents to US$104.79 a barrel. Copper was ahead four cents to $3.31.
Overnight, the Shanghai Composite Index gained 0.4 per cent to 2,052.24 and the Shenzhen Composite Index gained 0.2 per cent to 996.42. Hong Kong’s Hang Seng gained 0.7 per cent to 21,807.56. Elsewhere in Asia, Japan’s Nikkei 225 index ended 0.1 per cent higher at 13,615.19 while South Korea’s Kospi closed 0.2 per cent lower at 1,880.71.
In Europe, the FTSE 100 index of leading British shares was up 0.2 per cent at 6,544 while Germany’s DAX fell 0.2 per cent to 8,303. The CAC-40 in France was 0.1 per cent lower at 4,059.