The Toronto stock market was slightly higher mid-morning Wednesday amid disappointing results in the retail sector while traders looked to the release of minutes from the latest Federal Reserve meeting for hints on the pace of further interest rate increases.
The S&P/TSX composite index rose 12.33 points to 15,489.5. The Canadian dollar was unchanged at 91.38 cents (U.S.).
U.S. markets shook off early losses as the Dow Jones industrials edged up 26.14 points to 16,945.73, the Nasdaq inched ahead 0.01 of a point to 4,527.53 and the S&P 500 index climbed 2.05 points at 1,983.65.
Sears Canada Inc. reported a quarterly net loss of $21.3-million, or 21 cents per share, compared to a profit of $152.8-million, or $1.50, a year ago. Same-store sales dropped 6.8 per cent, which the company attributed partly to an unseasonably cool spring. Its shares slipped 62 cents to $15.45.
U.S. retailer Target, which is in the midst of a costly expansion into Canada, posted adjusted earnings of 78 cents a share, a penny less than expected. Revenue came in at $17.41-billion (U.S.), higher than the $17.38 that analysts expected. Its shares erased early losses to advance 57 cents to $59.82 as Target also cut its 2014 forecast to $3.10 to $3.30, versus the previous forecast of $3.49.
Quarterly net income at home improvement retailer Lowe’s increased 10 per cent to $1.04-billion, or $1.04 per share, bolstered by improving weather. The performance beat analysts’ expectations, but the company lowered its full-year revenue outlook slightly. Its shares fell 21 cents to $51.31.
Meanwhile, the U.S. central bank will release its latest minutes this afternoon. Traders will be looking to see how many individual Fed members feel rates have been kept too low for too long. Many analysts expect the Fed to move from rates that have hovered near zero since the financial crisis around the middle of next year.
But traders are particularly looking forward to Friday when Fed chairwoman Janet Yellen delivers a speech at the central bank’s annual economic symposium. She is expected to again signal hat the central bank is in no rush to hike rates and when it does, the pace will be gradual.
“We’re looking to confirm the Fed’s accommodative stance and give us a bit of insight on how they think about the slack in the labour market,” said Patrick Blais, managing director and portfolio manager at Manulife Asset Management.
While U.S. job growth has been coming in at around 200,000 monthly, the participation rate has drifted down to a percentage in the lows 60s.
“And in the back of their mind, they want to play safe and make sure the U.S. is on a real sustainable footing before giving any indication that they’re going to retreat from their easy monetary policy stance.”
The metals and mining sector led advancers, up 1.6 per cent as September copper jumped seven cents to $3.15 a pound. Some analysts attributed the jump to strong signs of a rebound in the U.S. housing sector, including strong data on housing starts and a jump in a prominent builders confidence survey.
The energy gained lost 0.26 per cent with September crude up 62 cents to $95.10 a barrel.
The gold sector faded 0.15 per cent while December bullion dipped $2 to $1,294.70 an ounce.