News Column

Market slightly ahead

May 1, 2014

Manulife, Bombardier in focus

The Toronto stock market was little changed Thursday as disappointing earnings reports outnumbered positives and traders took in tepid manufacturing data from China.

The S&P/TSX composite index gained 22.82 points to greet noon at 14,674.69

The Canadian dollar fell 0.06 cents at 91.17 cents U.S.

Manulife Financial's first-quarter net profit jumped 50% to $818 million, or 42 cents per share. Core earnings, excluding one-time items, were up at $719 million, or 37 cents, compared with $619 million, or 32 cents, year-over-year.

Analysts had expected 39 cents a share but its shares ticked 33 cents higher to $20.91 as rising wealth sales compensated for lower insurance sales.

Transportation giant Bombardier Inc. posted first-quarter net income of $115 million U.S., or earnings per share of six cents, compared with $148 million, or eight cents, in the same period of 2013.

Ex-items, earnings were eight cents a share, which was in line with expectations and its shares fell 22 cents or five per cent to $4.19.

Imperial Oil Ltd. lost 28 cents to $53.24 as the energy company earned a first-quarter net profit of $946 million, or $1.11 per share, up 19% from $798 million, or 94 cents per share, in the same quarter in 2013. Revenue and other income increased to $9.22 billion compared with $8.01 billion year-over-year.

Goldcorp earned $98 million U.S. or 12 cents a share in its latest quarter as increased gold sales offset lower prices. That's down from $309 million or 33 cents per share a year ago.

Ex-items, profit was $209 million or 26 cents per share, compared with an adjusted profit of $253 million or 31 cents per share in the first quarter of 2013 and its shares added 15 cents to $27.22.

Health-care stocks proved the runaway winner Thursday morning, as Catamaran Corp. triumphed $4.88, or 11.7%, to $46.52.


The TSX Venture Exchange eked higher 1.44 points to 1,002.94

Eight of the 14 Toronto subgroups were higher by noon ET, led by health-care stocks, up 4.9%, while information technology and the metals and mining sector each put on 0.8%.

The half-dozen laggards were weighed mostly by gold stocks, down 0.6%, energy, down 0.4%, and real-estate issues, sliding 0.2%.


Stocks started May on an apprehensive note as investors digest the latest stream of earnings reports, economic indicators and yesterday's record high for the Dow Jones industrial average.

The Dow Jones Industrial Average dipped 2.22 points to greet noon at 16,578.62, off its lows of the morning.

The S&P 500 regained 2.69 points to 1,886.64, and the NASDAQ composite index grew 27.91 points to 4,142.37.

MasterCard rallied 2% after the card giant logged stronger-than-expected results powered by double-digit volume growth.

ExxonMobil flirted with record highs as investors cheered the energy giant's big earnings beat and largely overlooked a modest revenue miss.

Shares of Avon Products tumbled 12% as investors fretted about the cosmetic company's big earnings miss amid an 11% drop in revenue. Avon also put to bed a long-running bribery probe by agreeing to pay $135 million in fines to U.S. regulators.

To give a sense of how not glamorous things are for Avon right now, the stock is trading at $13.40, lower than its worst dip during the recession.

Sony Corp slumped 4% after slashing its profit outlook and projecting a first-quarter loss. LinkedIn and Kraft Foods are set to report after the close, among others.

Shares of DirectTV spiked 5% on talk that AT&T may be making a bid for the satellite TV company.

T-Mobile US popped 7% amid renewed speculation of a tie-up with Sprint . T-Mobile, the fourth largest U.S. wireless provider, also said it added 1.3 million subscribers in the first quarter, although that didn't prevent a loss of $151 million U.S.

Confirming recent reports, Ford said CEO Alan Mulally will step down on July and be succeeded by Mark Fields, who has served as chief operating officer since late 2012. Also, KFC and Pizza Hut owner Yum Brands said Taco Bell CEO Greg Creed will replace David Novak in January.

On the economic front, the Institute for Supply Management's index on U.S. manufacturing climbed above forecasts in April, indicating a pickup in activity.

Elsewhere, the U.S. Labor Department said initial jobless claims climbed to a nine-week high of 344,000 last week, well ahead of estimates. The government also said consumer spending jumped by a stronger-than-expected 0.9% in March, the fastest pace since August 2009.

But the focus will shift after the closing bell to the government's all-important jobs report. Economists predict the U.S. added 210,000 new jobs in April, bringing the unemployment down to 6.6% from 6.7%.

Prices for 10-year U.S. Treasuries gained strength, lowering yields to 2.61% from Wednesday's 2.65%. Treasury prices and yields move in opposite directions.

Oil prices settled 24 cents to $99.50 U.S. a barrel.

Gold prices dropped $12.70 to $1,283.20 U.S. an ounce.

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Source: Baystreet Stock Market Update (Canada)

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