Go to the Globe and Mail homepage

Jump to main navigationJump to main content


Globe Investor

Market Updates

Up-to-the-minute insights
on developing market news

Entry archive:

  (Fred Lum/The Globe and Mail)


(Fred Lum/The Globe and Mail)

At midday: TSX in 'technical pullback' ahead of earnings season Add to ...

The Toronto stock market pulled back Tuesday, with traders eager to gauge the health of the North American economy as companies begin to report their second-quarter earnings.

The S&P/TSX composite index fell 121.73 points to 15,051.20, dragged down by energy, mining and financial stocks. The loonie rose 0.06 of a cent to 93.72 cents (U.S.).

Craig Jerusalim, a portfolio manager at CIBC, said investors shouldn’t be too worried about the decline because the long-term outlook for Canada’s largest market still remains positive.

“There’s a little profit-taking going on,” he said. “But if you look at the valuation of the TSX, it is slightly above the longer term average and it’ll stay above that average line. The fundamentals are supportive of that, and I wouldn’t get too concerned about the technical pull back.”

Jerusalim said these fundamentals include low interest rates, high oil prices, strong housing figures, and good earnings.

This week, traders will be looking for the start of a positive trend when U.S. aluminum giant Alcoa reports its earnings after markets close. The company is viewed as an economic bellwether because its aluminum products are widely used in various sectors like manufacturing, defence and the auto industry, and could point to the state of the American economy. Analysts are expecting Alcoa to post earnings per share of 12 cents, up sharply from seven cents a year ago.

U.S. markets were down with the Dow Jones industrials losing 111.04 points to 16,913.17, the Nasdaq dropping 62.66 points to 4,388.87, while the S&P 500 lost 13.49 points to 1,964.16 .The indexes had rallied last week to new highs following a U.S. government report that showed the world’s largest economy generated a stronger-than-expected 288,000 jobs in June.

The latest Canadian job numbers will come out on Friday when Statistics Canada releases its employment data for June. The agency is expected to report that about 24,000 jobs were created last month compared with 25,800 in May, with the jobless rate remaining unchanged at seven per cent.

Jerusalim said what will be most important is whether the growth is coming from full-time jobs, as opposed to part-time.

On the commodity markets, the August crude contract on the New York Mercantile Exchange gained 12 cents to $103.65 (U.S.) a barrel. But the price of oil slipped closer to $103 a barrel as concerns about possible supply disruptions continued to fade. Oil hit a 10-month closing high of $107.26 on June 20, reflecting worries that insurgents in Iraq might push into important oil-producing regions and choke off supplies from that country, the second-biggest exporter from OPEC (Organization of the Petroleum Exporting Countries).

August bullion fell $1.70 to $1,315.30 an ounce, while September copper dipped a penny to $3.26 a pound.

In Canadian corporate news, Quebec-based pharmacy chain Jean Coutu reported a lower first-quarter net profit of $54.1-million (Canadian), or 29 cents per share, compared with $108.6-million, or 51 cents per share, a year ago. Jean Coutu attributed the decrease is due to a gain of $54.4-million related to its investment in U.S. pharmacy chain Rite Aid. Most Canadian companies start to report their quarterly earnings later this month and into August.

Montreal’s CAE says it has signed contracts worth about $120-million with a number of global airlines and Bombardier for seven flight simulators, training equipment and other services. The airlines include Air France, Middle East Airlines, Indonesia’s Lion Air and Turkish Airlines.


More Related to this Story


For Globe Unlimited Subscribers

Business videos »

Most popular videos »


Most Popular Stories