The Toronto stock market was lower Tuesday as traders took a pause after a string of solid gains while taking in data showing a stronger-than-expected read on Canadian economic growth.
The S&P/TSX composite index declined 65.44 points to 12,247.23 with support coming from strong earnings reports from oil producer Suncor Energy (TSX:SU) and business technology company CGI Group Inc. (TSX:GIB.A).
The loonie was up 0.17 of a cent to 99.02 cents US as Statistics Canada reported that gross domestic product grew by 0.3 per cent compared with January. That was better than the 0.2 per cent rise economists had expected. The reading translates to annualized growth of 1.7 per cent.
GDP growth in January was also revised higher to 0.3 per cent from 0.2 per cent.
Shares of Suncor rose 99 cents to $30.63 after it posted operating earnings of $1.37-billion, or 90 cents per share Monday night, compared with $1.32-billion, or 84 cents per share, in the same period a year earlier. That handily beat the average analyst estimate of 75 cents per share, according to Thomson Reuters.
Canada’s largest energy company also increased its quarterly dividend to 20 cents per share from 13 cents and announced a $2-billion share buyback.
Business technology company CGI Group Inc. (TSX:GIB.A) posted net income of $114.2-million or 36 cents per diluted share, compared with $105.7-million or 40 cents per share a year ago when the company had fewer shares. Revenue soared to $2.53-billion from $1.065-billion, on the acquisition last year of Logica. CGI shares surged $2.80 or 10.36 per cent to $29.83.
Losses on U.S. indexes picked up after the Chicago Purchasing Managers Index, a key gauge of manufacturing in the U.S. Midwest, moved into contraction territory during April, coming in at 49, its lowest reading since September 2009, and down from 52.4 in March.
The Dow Jones industrials were down 58.66 points to 14,760.09.
The Nasdaq composite index fell 4.27 points to 3,302.75 and the S&P 500 index declined 4.4 points at 1,589.21.
Traders also took in data on U.S. house prices and lower than expected earnings from drug company Pfizer.
The drugmaker earned $2.75-billion (U.S.), or 38 cents per share, down from $1.79-billion, or 28 cents per share, a year earlier. Excluding one-time items, adjusted income was 54 cents per share.
Revenue was $13.5-billion, down nine per cent from $14.89-billion a year earlier.
Analysts surveyed by FactSet, on average, expected adjusted earnings of 55 cents per share and sales of US$13.99-billion and Pfizer shares were down 2.5 per cent.
The U.S. S&P Case-Shiller 20-city house price index rose by 0.3 per cent in February, which marked a 13th consecutive increase. The index was up 9.3 per cent year over year, the highest since the housing crash began in mid-2006.
On the TSX, the gold sector led decliners, down 2.2 per cent while June gold bullion on the New York Mercantile Exchange was up $2.70 to US$1,470.10 an ounce. Goldcorp Inc. (TSX:G) faded 66 cents to C$28.52.
The base metals sector was down 1.43 per cent while July copper on the Nymex slipped three cents to US$3.20 a pound. Teck Resources (TSX:TCK.B) declined 29 cents to C$26.10.
June crude fell 15 cents to US$94.35 a barrel and the energy sector was up 0.3 per cent. Canadian Natural Resources (TSX:CNQ) fell 36 cents to C$29.60.
The financials sector also weakened, down 0.5 per cent as TD Bank (TSX:TD) gave back 61 cents to $81.43.
Meanwhile, markets have become increasingly convinced that the U.S. central bank is in no hurry to end its current stimulus programs amid a combination of low inflation and modest U.S. economic growth.
And expectations that the European Central Bank will cut its main interest rate from the already all-time low of 0.75 per cent grew Tuesday as new data showed eurozone unemployment up at another record high of 12.1 per cent.
Also, inflation rose 1.2 per cent in the year to April, way down on the 1.7 per cent rate recorded in March and markedly below market expectations for a modest decline to 1.6 per cent. It was also well below the ECB’s target of keeping inflation “close to but below” two per cent.
In other earnings news, Thomson Reuters (TSX:TRI) reported a seven per cent decline in operating profit in the first quarter, citing severance costs and an increase in depreciation and amortization expenses.
The global news and information company said underlying operating profit was $462-million, with adjusted earnings of 38 cents per share and its shares were down 98 cents to $33.12.
European bourses were mixed as London’s FTSE 100 index moved down 0.07 per cent, Frankfurt’s DAX rose 0.62 per cent and the Paris CAC 40 declined 0.22 per cent.
10:13ET 30-04-13 Story ID: B7434 (Via Satellite)