At the open: TSX flat on sliding tech, miners

The Canadian Press

Heavy machinery is seen at First Quantum Minerals’ Frontier copper mine in Fungurume, southern Democratic Republic of Congo in this file photo. (© Katrina Manson / Reuters/Reuters)

The Toronto stock market was little changed mid-morning Thursday amid a mixed bag of earnings news while mining stocks continued to fall on demand concerns.

The S&P/TSX composite index was 5.05 points lower to 12,316.24 following a 135-point loss Wednesday after lower levels of expansion in manufacturing sectors set off a new round of concerns about the Chinese and American economies.

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Earnings reports and positive employment news helped push New York markets higher after also losing ground on Wednesday.

The Dow Jones industrial average rose 74.07 points to 14,775.02, the Nasdaq was ahead 23.98 points to 3,323.11 and the S&P 500 index was up 9.56 points to 1,592.26.

The Canadian dollar was up 0.12 of a cent to 99.32 cents U.S. as Canada’s trade position with the rest of the world improved during March.

Statistics Canada reported Canada’s trade balance went from a deficit of $1.2-billion in February to a surplus of $24-million in March. Economists had widely expected the balance would show a $700-million deficit.

Tech stocks led decliners as Constellation Software reported that adjusted net income for the quarter increased five per cent to $33-million, $1.57 on a diluted per share basis, from $32-million or $1.50 on a diluted per share basis a year ago. Revenue grew 31 per cent to $256-million but the company noted “the increase is solely attributed to growth from acquisitions as there was no organic growth” and its shares fell $4.38 to $131.52.

Research In Motion Ltd. was down 25 cents to $15.64.

After the markets closed Wednesday, Facebook said that its quarterly net income was $219-million, or nine cents per share, up from $205-million, also nine cents per share, in the same period a year ago when the company was still private. Its shares rose 92 cents to $28.35.

Commodity prices were higher after the weak economic data Wednesday pushed prices sharply lower.

But the metals and mining sector was off 0.6 per cent while July copper gained five cents to $3.13 U.S. after tumbling 11 cents.

HudBay Minerals Inc. shed 14 cents to C$7.60 after it said it had a profit of $1.9-million, or a penny per diluted share for the three-month period ended March 31, down from $3.4-million or three cents per diluted share a year earlier.

The gold sector was 0.45 per cent lower while June bullion recovered most of Wednesday’s loss, up $22.50 to US$1,468.70 an ounce.

Goldcorp earned $309-million compared to $479-million in the first quarter of 2012. Adjusted net earnings totalled $253-million, 31 cents per share, compared to $404-million or 50 cents per share a year ago. Revenues came in at $1-billion and Goldcorp shares faded 54 cents to $28.53.

The energy component was up 0.1 per cent while June crude contract on the New York Mercantile Exchange rose 91 cents to $91.94 (U.S.) a barrel.

The consumer discretionary sector led TSX advancers as clothing manufacturer Gildan Activewear reported net earnings of $72.3-million (U.S.) or 59 cents per share on a diluted basis, exceeding its earlier guidance of 54 to 57 cents per share. Net sales rose more than eight per cent to $503-million. It also upgraded its outlook for the year and its shares rose 73 cents to $41.78.

Industrials also advanced with Canadian Pacific Railway ahead $1.65 to $124.81.

Elsewhere, Manulife Financial posted net income of $540-million or 28 cents a share, down sharply from $1.22-billion a year ago as insurance sales fell 23 per cent to $619-million. Core earnings for the quarter at Canada’s largest life insurer were up 18 per cent to $619-million, or 32 Canadian cents per share, which matched expectations. Its shares edged up 44 cents to $15.20.

Meanwhile, the European Central Bank has cut its key rate to hopefully help the eurozone shake off the deep economic malaise that has set in as a result of its government debt crisis.

The ECB cut its key rate to 0.5 per cent from 0.75 per cent. Economists, however, warn this cut may not have much direct effect since banks are not passing on low rates in indebted countries that need help the most.

European markets were slightly higher since the ECB rate cut had been largely priced-in. London’s FTSE 100 index added 0.02 per cent, Frankfurt’s DAX gained 0.41 per cent and the Paris CAC 40 dipped 0.01 per cent.

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