A contractor cuts wood while working at the PulteGroup Inc. Sage housing development under construction in San Jose, Calif., on July 22, 2014. The U.S. housing market is showing signs of strength with July’s data on housing starts and building permits.David Paul Morris/Bloomberg
The Toronto stock market was higher Tuesday amid a solid earnings report from the biggest U.S. home improvement retailer and positive U.S. economic data.
The S&P/TSX composite index gained 53.42 points to 15,391.89. The Canadian dollar lost 0.2 of a cent to 91.66 cents (U.S.).
U.S. markets were higher as data showed consumer prices rose in July at the slowest pace in five months, held back by a drop in gasoline prices.
The U.S. Labor Department says consumer prices edged up a seasonally adjusted 0.1 per cent last month, which met expectations.
Other data showed housing starts surged 15.7 per cent in July to the highest level in eight months.
The Dow Jones industrials was ahead 34.87 points to 16,873.61, the Nasdaq was up 7.52 points to 4,515.83 and the S&P 500 index rose 3.93 points to 1,975.67.
There was further positive news from the housing sector as Home Depot Inc. reported its quarterly profit increased by 14 per cent to $2.05-billion, or $1.52 per share, beating estimates by eight cents. The home-improvement retailer said revenue rose nearly six per cent to $23.81-billion and beat forecasts of $23.57-billion. Its shares jumped 3.8 per cent to $86.82.
There was also a major corporate shakeup at the world's biggest miner.
BHP Billiton plans to split off some of its smaller assets into a separate company, the Australia-based company said as it posted a $13.8-billion (U.S.) annual profit. BHP said the reorganization will allow it to concentrate on its mainstay iron ore, copper, coal, petroleum and potash businesses. Its profit was up more than 23 per cent from last year. Revenue was up 1.9 per cent to $67.2-billion and its shares fell 3.4 per cent to $70.28 in New York.
Meanwhile, traders awaited possible guidance on the pace of interest rate increases by the Federal Reserve during 2015. Traders will review the minutes from the latest Fed interest rate meeting Wednesday afternoon. Then, on Friday, Fed chair Janet Yellen delivers the keynote address at the central bank's annual meeting in Jackson Hole, Wyo.
"There is some expectation that the Fed will (emphasize) the degree of slack in the economy and signal to the market that is in no rush for a policy rate hike and the pace of eventual policy normalization will be gradual," said a commentary from Barclays Research.
A calmer geopolitical backdrop seemed to also support markets Tuesday.
Russian Foreign Minister Sergey Lavrov said issues related to sending a humanitarian convoy to Ukraine were resolved following weekend talks in Berlin with his counterparts from Ukraine, Germany and France. Germany's Frank-Walter Steinmeier reported progress on "some issues," though Lavrov said there was no decision on establishing a cease-fire between the government and pro-Russian rebels.
Most TSX sectors were positive, led by a 0.55 per cent rise in the energy sector while September crude declined 54 cents to $95.87.
The gold sector was up 0.5 per cent as December bullion gained 80 cents to $1,300.10.
September copper was unchanged at $3.11 a pound and the base metals sector rose 0.1 per cent.