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Another solid day for stocks

February 13, 2014

Bombardier roughed up

The Toronto stock market gained ground Thursday amid a mixed slate of earnings reports from the insurance, retail manufacturing and resource sectors.

The S&P/TSX composite index bolted upward 101.16 points to close Thursday at 14,001.65

The Canadian dollar gained 0.21 cents to 91.09 cents U.S.

A major decliner was Bombardier Inc. Its shares tumbled 38 cents, or 9.4%, to $3.61 as the company reported that it had $129 million U.S. of quarterly adjusted net income, or seven cents per share, which was four cents below estimates.

It also said that delays in first deliveries of its delayed CSeries aircraft will add about $1 billion U.S. in development costs and capitalized interest.

On the earnings front, Manulife Financial Corp. says it had $685 million or 35 cents a share of core earnings in the fourth quarter, three cents short of expectations, and its shares fell six cents to $20.85.

The gold sector rose as Barrick Gold Corp. lost $2.83 billion U.S. in its latest quarter as the gold miner slashed it reserve estimates and said it expected production this year to fall from 2013. It beat on revenue expectations and its shares gained $1.25, or 6%, to $22.06.

The consumer discretion sector also helped lift the TSX as Canadian Tire Corp. earned quarterly net income of $191 million, or $2.35 a share, up from $162.8 million a year earlier. Revenue was $3.328 billion, compared with $3.166 billion and its shares gained $3.13 to $97.88.

The energy sector was up as shares in Cenovus Energy Inc. lost 88 cents to $28.76 as the oilsands producer reported $212 million or 28 cents a share of operating earnings, compared with a year-earlier operating loss of $188 million or 25 cents per share. Cenovus also says its quarterly dividend will rise 10% to 26.62 cents per share.

The base metals sector declined, as March copper dipped two cents to $3.23 U.S. a pound. Teck Resources blamed lower prices for a lower adjusted fourth-quarter profit of $227 million, or 40 cents a share. Teck shares fell $1.87, or 6.7%, to $25.99.

Internationally, Italian Prime Minister Enrico Letta faces a showdown with his own centre-left party on Thursday that could lead to his resignation and the appointment of Democratic Party leader Matteo Renzi as head of a new government within days.

On the economic front, Statistics Canada told us this morning that its new housing price index rose 0.1% in December, following no change in November. Monthly price movements have been fairly static since June 2012.


The TSX Venture Exchange recovered 4.72 points to 986.45

All but three of the 14 Toronto subgroups were higher Thursday, led by gold, shooting higher 3.9%, while materials gained 1.6% and health-care was 1.4% to the good.

The three laggards proved to be metals and mining, down 2.1%, global base metals, sliding 0.3%, and industrials, off 0.2%.


A bad batch of economic data and lackluster earnings didn't keep investors from buying stocks Thursday.

The Dow Jones Industrial Average gained 63.65 points by the close to 16,027.59.

The S&P 500 index forged higher 10.57 points to 1,829.83. The NASDAQ prospered 39.38 points to 4,240.67

The market was higher even though the government reported that retail sales unexpectedly fell in January. Economists were looking for no change last month, but sales dropped 0.4%. Excluding auto sales, sales were flat. Sales for November and December were also revised lower.

Higher-than-expected unemployment claims were also a negative.

And corporate earnings weren't particularly good either. Shares of Dow component Cisco fell after the company's weak revenue guidance disappointed investors. Despite reporting lower revenue and earnings, Cisco raised its dividend.

But cable stocks were moving dramatically after Comcast announced plans to acquire Time Warner Cable in a $45-billion U.S. deal that would combine the two biggest cable companies in the United States.

Time Warner Cable shares jumped on the news, while Comcast fell. Shares of Charter Communications, a smaller cable company that had hoped to acquire Time Warner Cable, plunged.

Shares of Cablevision Systems, which some feel could be the next cable company to be taken over, were also down after opening sharply higher.

The deal is subject to approval from regulators, including the Federal Communication Commission and either the Department of Justice or the Federal Trade Commission.

In other company news, shares of Whole Foods fell sharply after the grocery chain's first quarter profit and sales figures fell short of expectations. The company also cut its earnings guidance for the year.

Pepsi announced an increase in quarterly profit and revenue, but missed sales estimates, sending shares lower.

Goodyear reported an increase in profit and beat estimates. Shares of the tire giant spiked almost 10%.

Netflix said it acquired the rights for the animated series "Star Wars: The Clone Wars." The stock was up slightly and hit a new all-time high.

Prices for 10-year U.S. Treasuries moved lower, raising yields to 2.74% from Wednesday's 2.76%. Treasury prices and yields move in opposite directions.

Oil prices eked higher three cents to $100.32 U.S. a barrel.

Gold prices grew $6.60 to $1,301.60 U.S. an ounce.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Baystreet Stock Market Update (Canada)

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