Positive earnings reports helped push the Toronto stock market higher Wednesday.
The S&P/TSX composite index was up 48.85 points to 15,495.4, as traders also balanced data showing a strong economic rebound in the U.S. during the second quarter with a jobs report that fell short of expectations and an afternoon announcement on interest rates by the Federal Reserve.
U.S. gross domestic product grew by a better-than-expected annual pace of four per cent in the second quarter. The contraction of the economy in the January-March period because of severe winter weather was also revised to 2.1 per cent from 2.9 per cent.
“It really answers, in my mind how constructive the Federal Reserve’s quantitative easing has been, whether this huge intervention had a positive effect on the economy and to me the answer is yes,” said Monika Skiba, senior portfolio manager at Manulife Asset Management.
The Canadian dollar was off 0.42 of a cent to 91.67 cents (U.S.).
U.S. markets were well off early highs with the Dow Jones industrials down 69.9 points to 16,842.21, while the Nasdaq gained 8.39 points to 4,451.09 and the S&P 500 index slipped 3.96 points to 1,965.99.
Two days before the release of the American government’s employment report for July, payroll firm ADP reported that 218,000 jobs were created in the private sector during the month, short of the 235,000 print that was expected. Analysts looked for the U.S. government report to show that about 230,000 jobs were created during July.
Meanwhile, traders will look for any hint that the central bank could start to hike rates sooner than anticipated. Markets generally expect the U.S. Federal Reserve to start hiking rates away from near zero in mid-2015.
On the earnings front, Cenovus Energy Inc. shares gained 87 cents to $33.68 (Canadian) as the company more than tripled its second-quarter net earnings to $615-million or 81 cents per share as it benefited from increased oil production and higher commodity prices.
“Since the price of the commodity has been strong, the earnings of the companies are reflecting that, they’re better than expected,” added Skiba.
“But beyond this, we’re probably at the stage where higher prices would be negative for economic growth.
Meanwhile, shares of information technology services company CGI Inc. climbed 81 cents to $39.26 after it posted a third-quarter profit of $225.1-million, or 71 cents per share, up 26 per cent. Revenue was up 3.9 per cent to $2.7-billion.
Thomson Reuters posted a quarterly profit of $249-million or 31 cents per share, up slightly from a year ago. The company’s adjusted profit was $415-million or 51 cents per share, up from $403-million or 48 cents. Revenue held steady at roughly $3.16-billion and its shares advanced $1.39 to $41.47.
In the U.S., shares in Twitter surged 20 per cent after the social network’s earnings blew past expectations.
The TSX energy sector was up 0.4 per cent as September crude gained 10 cents to $101.07 (U.S.).
September copper was ahead two cents at $3.24 a pound and the base metals sector was ahead 0.8 per cent.
August bullion was off $4.80 to $1,293.50 an ounce.
The gold sector fell 1.1 per cent as investors get set to take in earnings later in the day from major miners including Barrick Gold after the close of trading.