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Equities

Canada’s main stock index rose early Thursday, bolstered by the continued rally in crude prices. South of the border, key Wall Street indexes were also positive as investors weigh corporate earnings and signs of an improving employment market.

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At 9:34 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 34.17 points, or 0.19 per cent, at 17,950.08.

In the U.S., the Dow Jones Industrial Average rose 14.2 points, or 0.05 per cent, at the open to 30737.78. The S&P 500 rose 6.5 points, or 0.17 per cent, at the open to 3836.66, while the Nasdaq Composite rose 63.5 points, or 0.47 per cent, to 13,674.06 at the opening bell.

For investors, earnings remain front and centre.

“The U.S. earnings season is proving to be a massive hit,” Axi chief global market strategist Stephen Innes said. “There are strong beats across all sectors, whether old economy or tech.”

In early trading, eBay shares jumped more than 6 per cent after the company topped sales and profit estimates in the latest quarter, driven by a surge in online shopping during the pandemic. EBay also projected first-quarter revenue in the range of $2.94-billion to $2.99-billion, above estimates of $2.53-billion, according to IBES data from Refinitiv.

Shares of Qualcomm, meanwhile, were off more than 8 per cent ahead after that company posted revenue short of analysts’ forecasts in the latest quarter. The company said that semiconductor supply constraints that have hit the industry were weighing on sales growth.

U.S. investors also got a better-than-expected reading on weekly U.S. jobless claims. The U.S. Labor Department said initial claims for state unemployment totalled 779,000 last week, down from 812,000 a week earlier. Economists had been expecting a number closer to 830,000. The report comes ahead of Friday’s key nonfarm payrolls figures for January.

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In this country, Suncor Energy Inc. reported a small loss in the fourth quarter, helped by cost-saving measures. The company reported a net loss of $168-million in the three months ended Dec. 31, compared with a net loss of $2.335-billion a year earlier. Suncor also said it exceeded operating cost reduction targets and reaffirmed its commitment to reduce debt and increase returns to shareholders in 2021. The results were released after the close of trading on Wednesday. Suncor shares were down more than 3 per cent in early trading in Toronto.

Early Thursday, investors also got earnings from BCE.

BCE also said Bell Canada is speeding up its network investments, with plans to boost its infrastructure spending to roughly $4.7-billion this year as it looks to bring internet to more homes and double the size of its 5G wireless footprint. The Globe’s Alexandra Posadzki reports that Bell’s plan to accelerate its capital expenditures comes amid growing demand for broadband due to the COVID-19 pandemic, which has moved workplaces, schools and entertainment online. That has resulted in record levels of traffic on Canada’s telecom networks. In the latest quarter, BCE reported earnings per share of 98 cents, up from 74 cents per share a year earlier.

Overseas, the pan-European STOXX 600 edged up 0.06 per cent. Britain’s FTSE 100 added 0.02 per cent. Germany’s DAX gained 0.23 per cent and France’s CAC 40 was also up 0.2 per cent. Ahead of the North American open, the Bank of England left rates and its bond-buying program unchanged.

In Asia, Japan’s Nikkei ended down 1.06 per cent while Hong Kong’s Hang Seng lost 0.66 per cent.

Commodities

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Crude prices extended recent gains on a sharp drop in U.S. inventories and a decision by OPEC and its allies to maintain current production caps.

The day range on Brent is US$58.45 to US$59.04. The range on West Texas Intermediate is US$55.77 to US$56.25. Both benchmarks have been hovering around their best levels in a year.

On Wednesday, OPEC+ members agreed to extend its current output policy, helping offset market concerns about demand growth as economies contend with the impact of the spread of the novel coronavirus. A document seen by Reuters this week showed OPEC expects the output cuts will keep the market in deficit throughout 2021, even though the group cut its demand forecast.

Markets also drew some support from new figures showing that U.S. crude oil inventories fell by 994,000 barrels last week to 475.7 million barrels. That was their lowest level since last March. Analysts had been expecting to see an increase.

“Falling inventories supported the energy but the positive move was balanced out by the fact that gasoline stockpiles surged by 4.46 million barrels,” CMC Markets analyst David Madden noted.

In other commodities, gold and silver prices dropped, weighed down by a firmer U.S. dollar.

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Spot gold fell 0.6 per cent to US$1,822.41 per ounce. U.S. gold futures slid 0.5 per cent to $1,825.20.

Silver declined 1.4 per cent to US$26.49.

“The moves in silver have been largely speculation and it’s becoming apparent that does not have a lasting effect,” said Michael McCarthy, chief market strategist at CMC Markets.

Currencies

The Canadian dollar was relatively steady in early going as its U.S. counterpart gained against most global counterparts on optimism over the U.S. economy and ebbing risk sentiment.

The day range on the loonie is 78.07 to 78.26 US cents.

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“The Canadian dollar is little changed on the day, with WTI holding around $56 a barrel providing some protection against the broader U.S. dollar advance,” Shaun Osborne, chief FX strategist with Scotiabank, said.

There were no major Canadian economic releases ahead of Friday’s January jobs report from Statscan.

On world markets, the U.S. dollar index, which weighs the greenback against a selection of currencies, was at 91.298, up 0.2 per cent on the day. The U.S. dollar drew support from bullish comments this week from Federal Reserve policymakers.

The euro, meanwhile, briefly fell below US$1.20 for the first time since Dec. 1, according to figures from Reuters. Britain’s pound was lower against the euro and down 0.5 per cent against the U.S. dollar at US$1.2580 - a 17-day low.

The yen was down around 0.1 per cent against the U.S. dollar at 105.180.

More company news

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Canada Goose Holdings Inc stock spiked 24 per cent in early trading after the retailer beat Wall Street estimates for quarterly revenue on Thursday, boosted by surging online sales coupled with growth in demand for the company’s luxury parkas in China. Revenue rose to $474-million from $452.1-million a year earlier, beating the average analyst estimate of $415.27-million, according to IBES data from Refinitiv.

Merck & Co said Kenneth Frazier will step down as chief executive officer at the end of June and will be replaced by Chief Financial Officer Robert Davis. Mr. Frazier took the helm in 2011, and the company’s stock price has doubled since then. Under Frazier watch, Keytruda has raked in blockbuster sales, becoming one of the leading products in a new generation of oncology treatments.

Royal Dutch Shell’s profit last year dropped to its lowest in at least two decades as the coronavirus pandemic hit energy demand worldwide though the company’s retail network and trading business helped cushion the blow. The Anglo-Dutch oil major’s annual profit slumped 71% to $4.8 billion as its oil and gas production and profits from refining crude into fuels dropped sharply. However, Shell said it planned to raise its dividend in the first quarter of 2021, which would be the second slight increase since its slashed its payout by two-thirds at the start of last year due to the pandemic.

Deutsche Bank swung to a small annual profit in 2020, its first since 2014, on the back of strong gains at its investment banking division, the German lender said on Thursday. The net profit attributable to shareholders of 113 million euros ($135.69-million) compares with a 2019 loss of 5.7 billion euros. Analysts had expected a loss of around 300 million euros for 2020.

Clorox Co raised its full-year sales forecast, as households kept up their heightened cleaning regimen with COVID-19 cases surging in the United States, boosting sales of its disinfecting products. The company said it expects fiscal 2021 organic sales to rise in the range of 10% to 13%, compared with a prior forecast of a 5% to 9% increase.

Economic news

Bank of England releases monetary policy announcement.

(830 a.m. ET) U.S. initial jobless claims for week ended Jan. 30.

(10 a.m. ET) U.S. factory orders for December.

With Reuters and The Canadian Press

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