The Toronto stock market was slightly higher Monday while BlackBerry stock continued to sell off amid collapsing sales and commodities failed to benefit from strong manufacturing data out of China and Europe.
The S&P/TSX composite index rose 10.73 points to 12,817.2 with strength coming from the telecom sector as the major players put down a deposit to take part in Canada’s next wireless spectrum auction in January.
BlackBerry shares were down 39 cents or 4.3 per cent to $8.69 after plunging more than 16 per cent Friday after the Waterloo, Ont., company warned of a huge second-quarter loss of almost $1-billion amid plunging sales of its new smartphones. It’s also slashing about 4,500 jobs. BlackBerry releases its quarterly results Friday.
Monday’s further deterioration in BlackBerry’s stock price came amid a number of downgrades, including RBC Capital Markets which cut the stock to underperform from sector perform.
The Canadian dollar was up 0.15 of a cent to 97.25 cents (U.S.).
U.S. indexes were largely weak with the Dow Jones industrials down 21.97 points to 15,429.12, the Nasdaq was up 3.77 points to 3,778.5 while the S&P 500 index slipped 4.42 points to 1,705.49.
On the TSX, the telecom sector rose 1.2 per cent as Telus, Bell Mobility, Rogers Communications and Quebecor’s Videotron were among the prominent telecom companies that have put down a deposit to take part in Canada’s wireless spectrum auction next January. Industry Canada says that a total of 15 participants have put down the deposit for the auction next Jan. 14. None of the 15 are foreign companies. Telus led the pack, up 59 cents to $35.17.
Commodity prices were lower despite signs that the world’s second biggest economy is gradually recovering from a prolonged slowdown.
The preliminary version of HSBC’s purchasing managers’ index for China climbed to a six month high of 51.2 from 50.1 in August on a 100-point scale. Numbers above 50 indicate an expansion in activity.
Another survey suggested that the economic recovery across the 17 European Union countries that use the euro is picking up and that unemployment may be peaking. The composite purchasing managers’ index, a gauge of business activity across the manufacturing and services sectors published by financial information company Markit, rose for the sixth month running to a 27-month high of 52.1 points in September from 51.5 in August.
November crude on the New York Mercantile Exchange dropped $1.13 to $103.62 (U.S.) a barrel. Prices fell almost four per cent last week amid deal-making aimed at eliminating Syria’s chemical weapons and the energy sector dipped 0.2 per cent.
The base metals sector rose 0.7 per cent as December copper lost three cents to $3.29 (U.S.) a pound. Teck Resources climbed 42 cents to $28.74.
The gold sector was up 0.56 per cent while December bullion declined $12 to $1,320.50 (U.S.) an ounce. Barrick Gold Corp. rose 33 cents to $19.44.
Investors are now turning their focus to the U.S., where the possibility of a government shutdown looms amid negotiations to raise the debt ceiling.
U.S. Federal Reserve chairman Ben Bernanke said last week that concerns over the latest fiscal showdown was a factor in the central bank’s decision to maintain its asset purchase program. The Fed surprised markets by not announcing that it would start tapering its monthly $85-billion of bond purchases.
Elsewhere on the corporate front, Calgary-based fertilizer producer Agrium Inc. says its third-quarter results will be negatively affected by soft prices and lower sales volumes in its wholesale operations. It says wholesale earnings before interest and tax will be about $200-million lower than in the same period last year.
Agrium also said it will increase its dividend by 50 per cent to $3 (U.S.) a share per year but its shares fell $2.72 to $90.78.
European bourses were lower despite an unexpectedly strong showing by Chancellor Angela Merkel in Germany’s national elections.
London’s FTSE 100 index declined 0.45 per cent, Frankfurt’s DAX was down 0.34 per cent and the Paris CAC 40 dropped 0.54 per cent.
Earlier in Asia, the positive Chinese manufacturing survey breathed some life into Chinese markets, with the Shanghai Composite Index rising 1.3 per cent and the smaller Shenzhen Composite Index spiked 2.2 per cent.
Elsewhere, trading was subdued. Japan’s stock market was closed for a public holiday while a powerful storm forced Hong Kong markets to close in the morning. In the afternoon, Hong Kong’s Hang Seng fell 0.6 per cent, South Korea’s Kospi rose 0.2 per cent while Australia’s S&P/ASX 200 fell 0.5 per cent.