The Toronto stock market racked up a modest advance late morning Thursday as a disappointing read on American consumer spending raised concerns about economic growth.
The S&P/TSX composite index climbed 15.93 points to 14,990.58.
The Canadian dollar rose 0.04 of a cent to 93.31 cents (U.S.).
U.S. indexes were deep in the red with the Dow Jones industrials down 75.97 points to 16,791.54, the Nasdaq was 19.1 points lower to 4,360.66 and the S&P 500 index fell 8.81 points to 1,950.72.
The U.S. Commerce Department says consumer spending rose 0.2 per cent last month after no gain in April, missing expectations for a 0.4 per cent rise.
“More importantly, in real-terms, consumption fell for the second straight month, down 0.1 per cent in May,” said BMO Capital Markets senior economist Jennifer Lee, who also observed that consumers still account for the “lion’s share” of the U.S. economy.
“Going forward, the second quarter will still see rebound but something in the order of around a three per cent annualized pace, down from our call of 3.8 per cent. This is very disappointing,” Lee said.
U.S. incomes rose a solid 0.4 per cent in May, which met expectations, after a 0.3 per cent April gain.
Meanwhile, an inflation gauge that’s closely monitored by the U.S. Federal Reserve has risen 1.8 per cent over the past 12 months, the fastest rise since late 2012 but still below the Fed’s two per cent target.
Data released Wednesday showed that the final revision to American economic growth in the first quarter showed that U.S. gross domestic product shrank 2.9 per cent, larger than the two per cent contraction economists had expected. However, the decline was due in large part to severe winter weather.
On the corporate front, grocer Sobey’s plans to close about 50 of its underperforming stores, most of them in Western Canada where parent company Empire Inc. purchased the Canada Safeway supermarket chain. Empire made the announcement as it also posted fourth-quarter adjusted net earnings from continuing operations of $131.3-million, or $1.42 per diluted share, beating estimates of $1.29. That compared with $95.7-million, or $1.40 per diluted share, in the same quarter of last year. Sales were $5.94-billion, up $1.68-billion year-over-year, narrowly missing expectations of $5.95-billion. It also upped its dividend 3.8 per cent to 27 cents a share and its shares slipped 47 cents to $66.63.
Also, media giant Shaw Communications reported quarterly earnings per share of 47 cents, two cents less than estimates. Revenue in the quarter was $1.34-billion, up one per cent year-over-year and its shares gained 10 cents to $26.45.
The TSX erased early losses thanks in part to the financial sector, which was ahead 0.4 per cent.
The telecom sector also provided lift, up 0.4 per cent.
The energy sector turned positive up 0.2 per cent as oil prices also declined as fears diminished somewhat over supply disruptions from Iraq with the August contract down 85 cents to $105.65 (U.S.) a barrel.
The gold sector was the major decliner, down 0.6 per cent while August bullion faded $8.80 to $1,313.80 an ounce.
July copper was down a cent at $3.15 a pound and the base metals component lost 0.4 per cent.Report Typo/Error