Traders work on the floor of the New York Stock Exchange January 29, 2014.BRENDAN MCDERMID/Reuters
The Toronto stock market was little changed Thursday, held back by gold stocks that fell alongside bullion prices following the U.S. Federal Reserve's latest move and data showing strong U.S. economic growth.
The S&P/TSX composite index edged up 4.2 points to 13,647.42 while the Canadian dollar was up 0.1 of a cent to 89.56 cents (U.S.).
New York indexes advanced amid data showing U.S. growth coming in at an annualized rate of 3.2 per cent, which was broadly in line with expectations. The reading was slightly lower than the 4.1 per cent rate registered in the July-September period. But for all of 2014, analysts are more optimistic with many forecasting GDP growth of three per cent or better.
The Dow Jones industrials rose 35.01 points to 15,773.8 following a 190-point slide Wednesday, the Nasdaq climbed 48.37 points to 4,099.8 and the S&P 500 index was ahead 12.36 points to 1,786.56.
The Fed said Wednesday that it was cutting its bond purchases by another $10-billion (U.S.) to $65-billion a month. It was the central bank's second such move to cut back on the stimulus credited for keeping long-term rates low and encouraging a rally on stock markets.
Markets have been rattled since last May, when outgoing chairman Ben Bernanke first mentioned the possibility of the central bank starting to taper its asset purchases as the U.S. economy improved.
But the cuts have also had the effect of drawing money out of many emerging markets, which in turn has put pressure on currencies in countries such as India, South Africa, Russia and particularly Turkey.
Investors have also been focused on fourth-quarter earnings and outlooks over the past couple of weeks on hopes that a strong corporate showing will help stock prices advance further. Last year, Fed easing helped the S&P 500 charge ahead about 30 per cent.
On Thursday, Potash Corporation of Saskatchewan said its fourth-quarter profit dropped 45 per cent from a year ago to $230-million (U.S.) or 26 cents a share as it took hits from lower fertilizer prices and an 18 per cent cut to its workforce. Revenue fell to $1.54-billion from $1.64-billion a year ago. Revenue was above the consensus estimate of $1.4-billion while earnings were below the general estimate of 31 cents per share and its shares lost $1.30 to $34.28 (Canadian).
Imperial Oil Ltd. reported it had $1.056-billion of net income in the fourth quarter, down slightly from a year earlier. The profit amounted to $1.24 per share, well above analyst estimates of 89 cents per share under standard accounting and its shares headed up 28 cents to $48.07.
In the U.S., industrial conglomerate 3M reported that fourth-quarter earnings rose 11 per cent to $1.1-billion or $1.62 a share, which meet expectations. Sales at the maker of Scotch tape, Nexcare bandages and Post-it Notes rose 2.5 per cent to $7.57-billion, missing estimates of $7.71-billion and its shares lost three per cent.
Royal Dutch Shell plans to slash capital spending and stop drilling for oil in the Arctic Circle as the company reported a sharp drop in fourth quarter earnings. Net profit was $1.78-billion, down 74 per cent from a year ago while production was down five per cent.
The industrials sector led advancers, up 0.8 per cent ahead of earnings from Canadian National Railways after the close. It is expected to earn 77 cent per share in adjusted profits in the fourth quarter, up from 71 cents per share in the prior year. Revenues were forecast to grow 8.6 per cent to $2.75-billion and its shares were ahead 30 cents to $58.38 (Canadian).
The energy sector was ahead 0.46 per cent while March crude on the New York Mercantile Exchange rose $1.12 to $98.48 (U.S.) a barrel.
Tech stocks were also strong with CGI Group up 92 cents to $34.39.
Financials also advanced with Manulife Financial ahead 21 cents to $20.71 (Canadian).
The gold sector fell three per cent while February bullion lost $21.50 to $1,240.70 (U.S.) an ounce. Barrick Gold faded 74 cents to $21.09 (Canadian) while Goldcorp shed 87 cents to $26.77.
Metal prices were lower with March copper down a cent to $3.23 (U.S.) a pound and the base metals sector was down 0.3 per cent.
European bourses were also lower as London's FTSE 100 index lost 0.26 per cent while Frankfurt's DAX and the Paris CAC 40 were down 0.3 per cent.