The Toronto stock market was little changed Wednesday amid a wave of positive Canadian earnings reports and indications China’s manufacturing slump may have bottomed out.
The S&P/TSX composite index added 7.34 points to 12,233.18 following a 178-point tumble while the TSX Venture Exchange was ahead 3.25 points to 1,292.76.
The Canadian dollar rose 0.33 of cent to 101.07 cents US, a day after the Bank of Canada maintained its bias towards future interest rate hikes and mentioned the possibility of high household debt levels playing a role in raising rates.
U.S. indexes were positive after racking up steep losses after earnings disappointments from DuPont chemical and conglomerate 3M Inc. reinforced a gloomy view of global economic prospects.
The Dow Jones industrials gained 29.36 points to 13,131.89, the Nasdaq composite index was up 14.41 points to 3,004.87, while the S&P 500 index advanced 3.65 points to 1,416.76.
The telecom sector led advancers, up one per cent while Rogers Communications Inc. (TSX:RCI.B) shares gained $1.60 to $42.68 as the telecom posted net income of $495 million or 96 cents per share, seven cents better than estimates and up from $489 million or 90 cents per share a year ago. Its revenue increased to $3.17 billion, up about one per cent from the same time last year and largely in line with analyst estimates.
The industrials sector rose 0.9 per cent as Canadian Pacific Railway Ltd. (TSX: CP) said its third-quarter net income was $224 million, an increase of $37 million, or 20 per cent and diluted earnings per share of $1.30, up 18 per cent compared with a year earlier. The profit beat analyst estimates by a penny a share and revenue was slightly above the consensus estimate and its shares ran up $4.26 to $92.15.
Teck Resources Ltd. (TSX:TCK.B) shares were 66 cents higher to $31.20 as the Vancouver-based producer of copper, coal and other minerals announced plans to severely slash capital spending this year and next in the face of a slowing global economy. The base metals sector was up 0.55 per cent as Teck also reported net income attributable to shareholders of $180 million or 31 cents per diluted share, compared with $814 million or $1.37 is the same 2011 period. Revenue was $2.5 billion, down from $3.38 billion.
The energy sector was lower while Encana Corp. (TSX:ECA) reported a US$1.24-billion net loss in the third quarter, primarily due to the impact of lower natural gas prices over the past year. But Encana said it’s still on track to meet its financial guidance for the full year. Most of the quarterly loss was attributed to a non-cash impairment charge that the Calgary-based company says doesn’t affect its operating earnings or cash flow, which were down sharply from last year. Its shares added eight cents to $22.64.
Elsewhere in the sector, Cenovus Energy (TSX:CVE) was off 17 cents to $33.64.
The early earnings news from the U.S. was also positive with aircraft maker Boeing turning in quarterly earnings of $1.35 a share, well above the $1.12 a share that was expected. Boeing’s 2012 overall profit outlook is expected to come in at $4.80 to $4.95 a share, against analyst expectations of $4.72 a share. Boeing’s shares rose 92 cents to US$73.74.
Facebook was also in focus after the world’s biggest social media company provided some proof it can make money from mobile advertising. Facebook said after the market close Tuesday that some 14 per cent of its ad revenue came from mobile advertising during the latest quarter. Its stock surged 22 per cent in pre-market trading as Citi research upgraded the stock to buy.
Facebook also posted a quarterly loss of $59 million, or two cents per share, in the July-September period, down from earnings of $227 million, or 10 cents per share a year ago, when Facebook was still privately held.
Commodity prices were little changed following steep losses Tuesday with December crude on the New York Mercantile Exchange off four cents to US$86.63 a barrel after sliding almost $2 on Tuesday.
December copper was unchanged at US$3.57 a pound. Worries about deteriorating economic conditions had pushed copper down 18 cents in the last four sessions.
December bullion rose $1.70 to US$1,711.10 an ounce.
Buying sentiment was also helped along by positive news from the world’s second-biggest economy.
A preliminary version of HSBC’s monthly purchasing managers’ index rose to a three-month high of 49.1 points. That still was below the 50-point level that indicates a contraction but was a strong improvement from September’s 47.9.
“While that marks the 12th consecutive sub-50 print, the reading also represents a three-month high for the index, lending further evidence to the notion of a soft landing in manufacturing activity,” said BMO Capital Markets senior economist Carl Campus.
The news wasn’t so positive out of Europe where a key survey of business activity, the so-called Purchasing Managers’ Index published by financial data company Markit, fell in October to its lowest level in over three years. A measure of German business confidence also fell.
Also, government debt in the 17-country eurozone rose to 90 per cent of the bloc’s economic output at the end of the second quarter. That’s the highest in the currency union’s 13-year history and bodes ill for governments trying hard to reduce debt by means of tough tax hikes and spending cuts.
European bourses were higher with London’s FTSE 100 up 0.33 per cent, Frankfurt’s DAX gained 0.42 per cent while the Paris CAC 40 rose 0.72 per cent.
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