CN WEIGHS ON TSX, BUT CHINA BRINGS LIFT

• The Toronto stock market closed slightly lower Tuesday, weighed down by industrial heavyweight Canadian National Railway Co. However, mining stocks got a lift after China’s leadership indicated it would take measures to support the economy.

The S&P/TSX composite index declined 13 points to 12,745.38 after running ahead for the past four sessions.

CNR depressed the TSX even as the railway handed in quarterly earnings that beat expectations following the close Monday.

CN earned $717-million or $1.69 per diluted share, up from $631-million ($1.44) a year ago. Ex-items, CN earned $1.66 per share, up from $1.50 a year ago and 4¢ ahead of estimates.

Revenue totalled $2.67-billion, up from $2.54-billion and slightly below estimates of $2.7-billion. Its shares fell $3.37 or 3.2% to $101.68 as CN also cautioned that a slowdown in grain and fertilizer exports during the summer months could make for a challenging second half of the year.

The Canadian dollar was ahead 0.55 of a cent to US97.23¢ after retail sales for May came in much better than expected. Statistics Canada reported that sales ran up 1.9%, much higher than the 0.4% gain that economists had expected.

The agency said the largest sales increase in dollar terms was a 4.3% gain at motor vehicle and parts dealers.

Meanwhile, Chinese media reported Premier Li Keqiang said that growth wouldn’t go below 7%. He also said that China’s economic growth needs to be kept above that minimum, according to

Beijing News, and reaffirmed 7.5% as this year’s growth target.

The report cleared uncertainty about how much China’s government would let the economy slow as it tries to shift the basis of growth toward domestic consumption and away from reliance on exports and industrial investment.

“Clearly, them putting the floor on growth is comforting because, for starters, you never really can be that confident about the data out of China,” said Wes Mills, chief investment officer, Scotia Asset Management PM Advisor Services.

U.S. indexes were mixed as traders took in a solid earnings report from United Technologies Corp. and looked ahead to earnings from Apple Inc. after the close.

The Dow Jones industrials gained 22.19 points to a new record closing high of 15,567.74, the Nasdaq composite index declined 21.12 points to 3579.27 and the S&P 500 index was down 3.14 points to 1692.39.

United Technologies climbed US$3.05, or 2.99%, to US$105.16. The conglomerate said second-quarter earnings ran up 17% as strong orders for its Otis elevator business in China and commercial airline parts helped lift sales and profits.

After the close, tech giant Apple turned in results that were slightly better than expected with earnings per share of US$7.47, a bit higher than the US$7.32 a share that analysts had expected.

Revenue came in at US$35.3-billion, slightly higher than the US$35.02-billion that was forecast.

Apple shares had closed down US$7.32 or 1.7% to US$418.99 in New York and rose about 3% in after-hours trading.