Although Canada would be a big beneficiary of resurgence in U.S. growth, the domestic equity market – still 36 per cent materials and energy stocks – would be hurt by declining resource demand in the emerging markets, according to Goldman’s 2014 outlook .Frank Gunn/The Canadian Press
The Toronto stock market was modestly higher Tuesday amid uncertainty about what the U.S. Federal Reserve may do about its asset purchase program and positive Chinese economic data.
The S&P/TSX composite index gained 17.64 points to 13,330.42 with most of the increase due to a sharp rise in the gold sector.
The Canadian dollar was up 0.12 of a cent at 94.15 cents US.
U.S. indexes were listless with the Dow Jones industrials off 34.25 points to 15,991.28. The Nasdaq was 7.52 points lower to 4,061.23 while the S&P 500 slipped 3.72 points to 1,804.65.
Investors have been hoping that the Fed wouldn't start tapering its US$85 billion of bond purchases until well into 2014. But a slate of strong economic data last week raised speculation that U.S. central bank could act a lot faster, maybe as early as next week when the Fed makes its next announcement on interest rates.
On the corporate front, food company Kellogg (NYSE:K) said it is closing its plant in London, Ont. by the end of 2014, resulting in the loss of more than 500 full-time jobs. The cuts are part of an overall restructuring Kellogg is undertaking to streamline its operations by 2018. Kellogg shares slipped 39 cents to US$61.55.
General Motors has named product development chief Mary Barra as the company's next CEO. Barra is in charge of design, engineering and quality of all of GM's vehicles across the globe. She's also in charge of purchasing and had previously headed the company's human resources operations. GM shares dipped six cents to US$40.83.
There was also news of a shakeup at the top of clothing retailer Lululemon Athletica (NASDAQ:LULU) where founder and chairman Chip Wilson plans to resign in the wake of comments he made that seemingly blamed customers' weight for the company's recent sheer pants problem.
At the same time, the board of Vancouver-based Lululemon has appointed Laurent Potdevin as the new CEO to succeed Christine Day, who was chief since 2008. She announced her intention to resign in June. The company's stock was up 47 cents to $70.81.
On the economic front, China's factory production rose 10 per cent in November from a year earlier, slightly lower than analysts' forecasts. But retail sales rose 13.7 per cent, which was stronger-than-expected.
The gold sector ran ahead four per cent even as February bullion gained $29 to US$1,263.20 despite heightened Fed speculation. The central bank's quantitative easing efforts had pushed gold as high as US$1,900 in 2011 as investors thought the massive bond buying program would drive inflation higher. Barrick Gold (TSX:ABX) improved by 75 cents to US$17.76.
The energy sector rose 0.2 per cent as the January crude contract moved ahead $1.18 to US$98.48 a barrel amid optimism that data out Wednesday will show another sizable drawdown of American crude inventories.
The base metals sector was ahead 0.1 per cent while March copper was up two cents to US$3.28 a pound.
The financials sector was the weakest component, down 0.5 per cent with Manulife Financial (TSX:MFC) down 17 cents to $20.03.
In other corporate news, Chorus Aviation (TSX:CHR.B), which flies most of Air Canada's regional flights in North America, increased its dividend by 50 per cent in the wake of its arbitration win against Air Canada. The company will pay a quarterly dividend of 11.25 cents per share. Chorus had cut its quarterly payment to shareholders in half to 7.5 cents per share in May amid uncertainty about the arbitration process. Chorus shares jumped 22 cents or 5.9 per cent to $3.95.
Japan's Nikkei 225 closed down 0.3 per cent, Hong Kong's Hang Seng fell 0.3 per cent while China's Shanghai Composite was nearly unchanged at 2,237.49. South Korea's Kospi shed 0.4 per cent.
European bourses were lower with London's FTSE 100 down 0.12 per cent, Frankfurt's DAX slipped 0.03 per cent and the Paris CAC 40 was off 0.18 per cent.