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At the open: Markets dip, but RIM holds steady on TSX

Traders work the floor at the New York Stock Exchange


North American stock markets opened slightly lower despite a busy morning of corporate news that included a slew of earnings reports.

In early trading, the S&P/TSX composite index was down 25 points, or 0.2 per cent, at 12,768. The S&P 500 was down 3 points, or 0.2 per cent, at 1,483 - but remaining near five-year highs. The Dow Jones industrial average was down 10 points, or 0.09 per cent, at 13,640.

Research In Motion Ltd. shares rose 10 per cent on the Nasdaq, playing catch-up to the surge on the TSX on Monday while the U.S. was closed for a holiday. RIM shares on the TSX this morning are nearly unchanged after sliding about 2 per cent in the opening minutes of trade.

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Overnight, Japan was a key focus. Its central bank announced the most aggressive steps yet to end years of economic stagnation, saying it would switch to an open-ended commitment to buying assets next year as it doubled its inflation target to 2 per cent.

Yet, U.S. stock futures slipped after the announcement, the Nikkei closed lower, and the Japanese yen strengthened the most in eight months against the U.S. dollar - not helpful for the country's export sector. The central bank's actions were widely expected and already largely factored into the market. There was also some disappointment the bank didn't go further - for instance, the asset purchases won't kick in for another year and the bank didn't set a deadline for the inflation target. And there are plenty of skeptics that think the moves won't successfully kick-start the Japanese economy anyway, after so many years of stagnation.

European stocks are mostly lower this morning, although there was some uplifting data out of Germany. The ZEW economic expectations index, a measure of German investor sentiment, rose more sharply than expected in January, jumping by 24.6 to reach 31.5. That was the highest level since May 2010.

Here in Canada, retail sales for November came in stronger than expected, rising 0.2 per cent from October. Economists had forecast a monthly drop of 0.1 per cent. Stateside, existing home sales for December unexpectedly fell 1 per cent to 4.94 million on an annualized basis. Economists had expected sales of 5.1 million.

Here's a look at some of the other stocks moving on news this morning:

Canadian National Railway Co. hiked its quarterly dividend by 15 per cent as it met Street expectations in reporting fourth-quarter profit of $1.41. Investors don't seem too thrilled; the stock is down 1.1 per cent in early TSX trading.

Inmet Mining Corp. has recommended that shareholders reject a hostile takeover bid from First Quantum Minerals, saying the $5.1-billion cash and stock bid fails to reflect the value of its massive Cobre Panama project. It says it has approached a number of third parties who have expressed interest in considering strategic alternatives to the First Quantum bid. Shares in Inmet are up 0.3 per cent.

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Verizon Communications Inc. reported adjusted fourth-quarter earnings of 38 cents per share, missing analysts' expectations of 50 cents. Revenues of $30.05-billion was ahead of Street forecasts of $29.82-billion. Shares are up 0.4 per cent.

Freeport-McMoRan Copper & Gold Inc. said its fourth-quarter profit rose 16 per cent to $743-million, or 78 cents a share. Analysts were looking for 71 cents a share. Shares are up 2.5 per cent.

Johnson & Johnson said it earned $1.19 per share, excluding special items, in its latest quarter, beating market expectations for $1.17. Global revenue rose 8 percent to $17.56-billion, below Wall Street expectations of $17.7-billion. Shares are down 0.5 per cent.

E.I. du Pont de Nemours & Co. reported net income of $111-million (U.S.), or 12 cents per share, excluding significant items, compared to net income of $373-million, or 40 cents per share, for the fourth quarter of 2011. The results beat the consensus estimate of Wall Street analysts of 7 cents per share and shares are up 0.5 per cent.

Delta Air Lines reported a lower quarterly profit on Tuesday as Superstorm Sandy hurt its airline. Excluding one-time items, profit was 28 cents a share, while revenue rose 2 per cent to $8.6-billion. Both its adjusted profit and its revenue were slightly better than expected by analysts. Shares are down 0.1 per cent.

AT&T said has reached a deal to buy the Alltel U.S. wireless operations for about $780-million to boost its spectrum in rural areas. AT&T shares are up 0.3 per cent.

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About the Author
Investment Editor

Darcy Keith is The Globe and Mail's Investment Editor. He has been a business journalist since 1992 and joined the Report on Business in 2010 from Yahoo! Canada, where he was the senior editor of finance. More


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