At the open: TSX climbs on Fed relief, BlackBerry results

TORONTO — The Canadian Press

BlackBerry employees prepare an event in London, England, on Jan. 30, 2013. (Lefteris Pitarakis/AP)

The Toronto stock market headed higher Friday at the end of a positive week after the Federal Reserve removed a great degree of uncertainty over its stimulus plans.

Traders also focused on BlackBerry after the struggling smartphone maker handed in quarterly earnings that were worse than expected.

The S&P/TSX composite index ran ahead 78.19 points to 13,470.39 with gains spread across all sectors.

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BlackBerry posted a loss of $4.4-billion (U.S.) or $8.37 a share, down from a profit of $9-million or two cents a share a year ago.

Poor sales of its new BlackBerry 10 devices sent revenue tumbling 56 per cent from a year ago to $1.2-billion (U.S.), which was $400-million lower than analyst estimates compiled by Thomson Reuters. Adjusted losses from continuing operations, which filter out various expenses like restructuring costs, were $354-million, or 67 cents per share, 23 cents below analyst estimates.

BlackBerry also said it finished the quarter with $3.2-billion in cash, and expects that strong cash position to continue in the current quarter. The firm also announced it had entered into a five-year strategic partnership with Foxconn to make phones in Indonesia and other fast-growing markets. Its stock enjoyed a brief pop but was later down 15 cents to $6.52 on the TSX and off 17 cents to $6.08 in New York.

The Canadian dollar declined 0.27 of a cent at 93.49 cents (U.S.) amid a rise in inflation pressures in November while the greenback strengthened on data showing third quarter growth was much stronger than originally thought.

Statistics Canada says that the Consumer Price Index rose 0.2 per cent in November amid higher gasoline prices, following a 0.1 per cent decline in October.

Meanwhile, the U.S. Commerce Department said that the economy grew at a solid 4.1 per cent annual rate from July through September, the fastest pace since late 2011 and significantly higher than previously believed. Much of the upward revision came from stronger consumer spending.

The final look at growth in the summer was up from a previous estimate of 3.6 per cent.

U.S. indexes were positive two days after the the Fed ended months of speculation and announced it will start to end its latest asset-purchase program.

The Dow Jones industrials were up 65.76 points to 16,244.84, the Nasdaq lost 18.72 points to 4,076.85 and the S&P 500 index was ahead 7.58 points to 1,817.18.

Policymakers decided to cut from January $10-billion the Fed’s monthly purchases of U.S. Treasuries and mortgage-backed securities. It also said it “will likely reduce the pace of asset purchases in further measured steps at future meetings.”

The also Fed emphasized that its main interest rate would remain low until U.S. unemployment falls below 6.5 per cent. It’s now seven per cent.

The energy sector led advancers, up 0.75 per cent as February crude on the Nymex lost 11 cents to $98.93 (U.S.) a barrel. Canadian Natural Resources was up 42 cents to $35.44 (Canadian).

The financials group was ahead 0.53 per cent with Manulife Financial ahead 21 cents to $20.96.

The TSX gold sector climbed 0.5 per cent while gold prices ticked slightly higher after plunging over $40 on Thursday to three-year lows. The February contract on the New York Mercantile Exchange rose $3 to $1,196.60 (U.S.) an ounce.

Quantitative easing had supported gold prices because of inflationary fears. But inflation is tame in many countries and data out earlier this week showed the consumer price index rising at an annual rate of only 1.2 per cent, significantly below the Fed’s inflation target of two per cent.

Gold prices are down 29 per cent so far this year while the TSX Global Gold sector has tumbled about 50 per cent. On Friday, Iamgold was up three cents to $3.50.

March copper gained a cent to $3.31 (U.S.) a pound and the base metals component also rose 0.5 per cent. Teck Resources climbed 34 cents to $26.

Enbridge shares were 31 cents higher to $45.64 after a joint review panel gave the thumbs up to the company’s proposed Northern Gateway pipeline that would connect the Alberta oil sands to tankers on the B.C. coast. However, the panel attached 209 conditions to the controversial $6-billion project. The final decision rests with the federal government, which has roughly six months to respond to the report.

European bourses were mixed with London’s FTSE 100 index up 0.29 per cent, Frankfurt’s DAX was up 0.52 per cent, and the Paris CAC 40 added 0.23 per cent.

Earlier in Asia, Japan’s Nikkei index recovered some early losses near a six-year peak as investors welcomed the continued weak yen, which is expected to boost exports. Hong Kong’s Hang Seng index fell 0.3 per cent and China’s Shanghai composite dropped two per cent on fresh concerns of a shortage of credit.

The People’s Bank of China moved late Thursday to inject liquidity after the interbank market showed stress, but concerns over a repeat of the summer’s credit crunch weighed on the market.