The Toronto stock market was positive Wednesday as traders digested mixed news from the retail sector and looked to a run of positive earnings reports from the big banks.
The S&P/TSX composite index gained 69.06 points to 14,594.25. The Canadian dollar was down 0.31 of a cent at 91.45 cents (U.S.).
New York was also higher as traders looked ahead to the release of the minutes of the most recent U.S. Federal Reserve meeting for clues on what the central bank’s intentions are about raising interest rates.
The Dow Jones industrials jumped 143.3 points to 16,517.61, the Nasdaq climbed 23.63 points to 4,120.52 and the S&P 500 index rose 11.64 points to 1,884.67.
Sears Canada posted a quarterly net loss of $75.2-million, or 74 cents per share, up from a net loss of $31.2-million, or 31 cents per share, a year ago. Revenues came in at $771.7-million compared to $867.1-million year-over-year, impacted by cold weather and store closures and its shares drifted a penny lower to $15.30.
Home improvement retailer Lowe’s fiscal first-quarter net income climbed 16 per cent to $624-million, or 61 cents per share. Ex-items, earnings were 58 cents per share, two cents short of expectations. Revenue rose two per cent to $13.4-billion, short of expectations of $13.89-billion. Lowe’s also raised its full-year earnings outlook and its shares fell 44 cents to $45.08 (U.S.).
Tiffany & Co. reported a 50 per cent spike in first-quarter earnings to $125.6-million, or 97 cents per share, far above expectations of 78 cents per share. Revenue at the jeweller climbed 13 per cent to $1.01-billion, also topping estimates. Tiffany also raised its earnings guidance for the year and its shares jumped 9.1 per cent to $96.26.
And Target reported that adjusted earnings came in at 70 cents a share, a penny lower than expectations. Revenue of $17.01-billion was in line with expectations and Target also lowered its outlook and its shares were ahead 41 cents to $57.02. The results were released a day after the company replaced the president of its struggling Canadian operations.
Stock markets have been rattled in recent days by retail earnings and outlook disappointments. But analysts say it’s important to remember that the sector has had an extremely challenging quarter and that the trend of recent economic data is positive.
“We have gone through a very harsh winter and we have gone through a spring that has not exactly been all that great and so that has had a pretty significant effect on a broad number of companies across the economy,” said Colum McKinley, portfolio manager and vice president, Canadian Equities, CIBC Asset Management.
“But we really need to look through the short-term dynamics of the effect of the weather and I think it would be too early to read this and interpret the results that we’ve seen as a broader economic slowdown.”
Financials led advancers, up 0.6 per cent a day before the big Canadian banks start to release quarterly earnings results. Royal Bank and TD Bank report on Thursday and analysts are expecting another solid if unspectacular quarter.
On the commodity markets, the energy sector was ahead 0.5 per cent, while July crude in New York gained $1.07 to $103.40 (U.S.) a barrel.
The base metals sector was up 0.25 per cent as July copper dipped two cents to $3.12 a pound.
The gold sector was flat while June gold faded $4.50 to $1,290.10 an ounce.