The Toronto stock market racked up a modest advance late morning Tuesday amid mixed economic data from the U.S. and an earnings report from Bank of Montreal (TSX:BMO) that beat expectations.
The S&P/TSX composite index rose 12.86 points to 12,713.24 while the TSX Venture Exchange gained 3.21 points to 1,682.71.
Bank of Montreal kicked off the big banks' quarterly reporting season by handing in first-quarter profits that rose 34 per cent to $1.1-billion or $1.63 a share. On an adjusted basis, earnings were $1.42 per share, beating analyst estimates by six cents. Revenue increased to $4.12-billion from $3.47-billion and its shares rose 53 cents to $58.54.
The bank benefited from its major expansion into the U.S. with the recent acquisition of Milwaukee-based Marshall & Ilsley Corp. and analysts believe those deals will continue to help boost results.
"The acquisitions that banks have done in the U.S. will be accretive on a going forward basis," said Sadiq Adatia, chief investment officer at Sun Life Global Investments.
"I think that's exactly what the banks envisioned when they first started purchasing these things that even though there was a slowdown in the U.S., that eventually the country will get back on track and that will help diversify some of the streams that they're getting from just the Canadian sources."
TD Bank (TSX:TD), Royal Bank (TSX:RY) and National Bank (TSX:NA) all report on Thursday.
A major early decliner was engineering group SNC-Lavalin Group Inc. (TSX:SNC). The company announced it needs to investigate $35-million in undocumented payments booked last year, it is cutting its 2011 profit forecast by 18 per cent and delaying the release of its fourth-quarter and full-year financial results. Its shares tumbled $11 or 22.74 per cent to $37.37.
Rising copper and gold prices helped push the commodity-sensitive Canadian dollar up 0.32 of a cent to 100.4 cents (U.S.).
U.S. markets advanced while the U.S. Commerce Department said orders for durable goods — products that are expected to last at least three years — fell four per cent last month, much more than the 1.1 per cent drop that economists were expecting. So-called core capital goods, which are viewed as a good measure of business investment plans, fell 4.5 per cent, the biggest drop in a year. Demand for these goods hit an all-time high in December as companies rushed to take advantage of expiring tax breaks on purchases of capital goods.
Helping to balance that negative reading was other data showing that U.S. consumer confidence in February rose dramatically to the highest level since a year ago.
The Conference Board's consumer confidence index now stands at 70.8, up from a revised 61.5 in January, helped by consumers' improving assessment of the job market. Analysts had expected a reading of 63.
"I've been bullish on the U.S. since mid-2011 and the reason for that has been that I've been seeing those signs," added Adatia.
"Housing values have been somewhat stabilized and the consumer has been feeling more confident because the unemployment number has actually been decreasing so consumers say, my housing value has stabilized, they're getting some job growth, the economy seems to be picking up some traction — hey, things are not too bad."
The Dow Jones industrial average gained 28.08 points to 13,009.59. The Nasdaq composite index was 21.04 points higher points to 2,987.2 while the S&P 500 index gained 4.75 points to 1,372.34.
The gold sector was ahead 0.55 per cent as the April contract rose $10.50 to $1,785.40 (U.S.) an ounce. Goldcorp Inc. (TSX:G) rose 53 cents to $48.88.
The TSX energy sector was flat as oil prices dipped for a second day with the April crude contract on the Nymex down 29 cents to $108.27 (U.S.) a barrel. Cenovus Energy (TSX:CVE) lost 21 cents to $38.55.
Crude has jumped 13 per cent this month, largely over concerns about Iran's nuclear program and the worry about supply disruptions from the Mideast. The sudden surge has raised concerns about how higher crude prices could affect the U.S. economic recovery, pressure corporate earnings and worsen a European recession.
The base metals sector was down 0.55 per cent even as copper prices continued to surge with the March contract up three cents to $3.91 (U.S.) a pound. Prices for the metal are up about 3.5 per cent this month on signs of improving economic growth in the U.S. and hopes that China will further relax lending standards to encourage growth. China is the world's biggest consumer of the metal.
Shares in molybdenum producer Thompson Creek Metals Co. Inc. (TSX:TCM) fell $1.10 or 12.7 per cent to $7.56 as it reported a small quarterly profit of $800,000 (U.S.). Revenue fell to $116.7-million (U.S.) from $156.8, reflecting a sharp drop in the price of molybdenum, which is used in high-strength steel alloys.
Elsewhere in the sector, First Quantum Minerals (TSX:FM) rose 23 cents to $22.95.
In other earnings news, Ritchie Bros. Auctioneers Inc. (TSX:RBA), the world's largest auctioneer of industrial equipment, reported its net profits rose to $76.6-million (U.S.), or 72 cents a share for 2011. That compared to net earnings of $65.7-million or 61 cents in 2010. Ritchie said its fourth quarter profits more than doubled to $26.8-million. Ritchie shares lost $1.57 to $24.01.
European markets were also weak with London's FTSE 100 index up 0.02 per cent, Frankfurt's DAX rose 0.14 per cent and the Paris CAC 40 was ahead 0.47 per cent.