The Toronto stock market was slightly higher Friday at the end of a positive week with the TSX powered by earnings news and positive manufacturing data from China.
Friday’s gains were led by the energy and utilities sector, leaving the S&P/TSX composite index up 9.28 points to 13,334.03.
The Canadian dollar was down 0.17 of a cent to 95.75 cents US, lower for a third day after the Bank of Canada removed its tightening bias and downgraded its economic forecast. The move led analysts to believe that interest rate hikes are off the table until 2015, leading the loonie to fall more than 1.25 cents this week.
U.S. indexes were higher amid well-received earnings reports after the close from Amazon and Microsoft.
The Dow Jones industrials was ahead 23.44 points to 15,532.65, the Nasdaq ran up 13.66 points to 3,942.62 and the S&P 500 index rose 2.93 points to 1,755.
Meanwhile, traders continued to take in economic reports that were held up during the partial U.S. government shutdown for more than half of October.
The latest data showed that durable goods orders for September were up 3.7 per cent. Minus transportation orders, durable goods orders actually slipped 0.1 per cent.
After the close Thursday, Amazon.com posted a quarterly loss of $41-million, or nine cents per share, matching analyst expectations. Revenue jumped 24 per cent $17.09-billion against expectations of $16.76-billion and its stock surged US$30.09 or 9.06 per cent to $362.30.
Microsoft’s net income in three months through Sept. 30 grew 17 per cent to $5.24-billion, or 62 cents per share, from $4.47-billion, or 53 cents per share, a year ago. That beat the 54 cents expected by analysts. Revenue rose 16 per cent to $18.53-billion, also beating the $17.79-billion analysts were expecting and its shares were ahead $2.12 or 6.3 per cent to $35.84.
It’s a quiet day for earnings out of Canada after a week that saw positive earnings reports from the likes of Teck Resources (TSX:TCK.B), Goldcorp (TSX:G), Canadian National Railways (TSX:CNR) and Canadian Pacific Railway (TSX:CP).
“Some good numbers are coming out of corporations and then the international markets (and) the eurozone are starting to look better,” said Sadiq Adatia, chief investment officeer at Sun Life Global Investment.
“The confidence is starting to improve from that standpoint and heading into the new year, people are not seeing anything that might pop up that might derail this rally right now.”
CP was in focus Friday after its biggest shareholder sharply narrowed its position. Bill Ackman’s Pershing Square Capital Management has sold about a third of its holdings in the railroad.
CP, which reported a record quarterly profit on Wednesday, said the hedge fund has sold 5.96 million CP shares for about US$140.00 a share, bringing the total divestment so far to seven million shares. On Friday morning, CP shares added five cents to C$148, which is more than triple their level when Pershing Square began building up its stake in the railroad.
The beaten-down utilities sector led advancers, up almost one per cent. The interest-rate sensitive sector has been under selling pressure since June amid speculation over when the U.S. Federal Reserve may start to wind down its monthly US$85-billion of bond purchases. That speculation pushed U.S. government bond yields substantially higher from around 1.6 per cent in early May to almost three per cent during September. The benchmark U.S. 10-year Treasury yield has since backed away to about 2.5 per cent. Canadian Utilities (TSX:CU) added 69 cents to $37.92 and Atlantic Power (TSX:ATP) improved by six cents to $5.38.
Commodities were mixed as December crude inched ahead 39 cents to US$97.50 a barrel and the TSX energy sector climbed 0.36 per cent. Suncor Energy (TSX:SU) gained 28 cents to $37.35.
The TSX gold sector was down 0.6 per cent while December bullion faded $3.10 to US$1,347.20 an ounce. Goldcorp (TSX:G) dropped 40 cents to C$27.36.
The base metals component gave back 0.33 per cent after gaining Thursday in the wake of data showing stronger than expected expansion in the Chinese manufacturing sector as December copper lost one cent to US$3.25 a pound. Teck Resources was 59 cents lower to $29.95.
The tech sector was also negative with CGI Group (TSX:GIB.A) down 51 cents to $35.38. A subsidiary, CGI Federal, was one of the main contractors for the U.S. government’s troubled healthcare insurance website and its shares have slid 8.5 per cent since Oct. 16. A congressional committee was told this week that the government didn’t allow enough time to test the system before it went online Oct. 1.