TSX UP AS BLACKBERRY CLIMBS ON EARNINGS
BY LINDA NGUYEN
• The Toronto stock market ended its five-day losing streak Friday, rebounding in a session helped by energy and infotech stocks, particularly BlackBerry Ltd. whose shares surged 5% after the company beat earnings expectations.
The S&P/TSX composite index soared 133.20 points to 15,026.77, while the Canadian dollar dipped US0.38¢ to US89.65¢.
Wall Street also snapped back from deep losses from the previous day. The Dow Jones industrial average added 167.35 points to 17,113.15, Nasdaq gained 45.44 points to 4,512.19 and the S& P 500 index saw an uptick of 16.86 points to 1,982.85.
It’s been a wild week for investors, who saw the Toronto market plunge more than 200 points Thursday, capping a fifth day of declines. The U.S. indexes did even worse, sporting the steepest declines in two months as the Dow shed nearly 250 points. Despite Friday’s gains, all indexes were still down for the week.
Kevin Headland of Manulife Asset Management said investors have been scratching their heads trying to figure out what was behind the deep drops.
“I think it was a reaction and an overreaction,” said Mr. Headland, who is director of the portfolio advisory group. “If you look at the fundamentals, there is no reason for a major sell-off.”
He said usually market direction can be driven by political instability, a bad earnings report from a big firm, or disappointing economic figures. But on Thursday, there was none of that.
“It might be because people are still coming back from the summer slow season and are reallocating their portfolios,” said Headland. “But today’s immediate snap-back shows that the declines were not based on fundamentals.”
In corporate news, BlackBerry says it had an adjusted loss of 2¢ per share in its latest quarter — better than the loss of 16¢ per share that analysts had expected.
However, chief executive John Chen, who joined the company last November, concedes the struggling smartphone marker has travelled only half the way on its journey back to profitability as it battles intense competition from Apple Inc. and Samsung Electronics Co. It released its latest smartphone, the Passport, earlier this week, with hopes of winning back once-loyal corporate customers.
BlackBerry shares closed up about 5%, or 56¢, at $11.44 in Toronto.
The markets also got a boost from the latest U.S. gross domestic product data.
The third and final official estimate for second-quarter GDP says the world’s largest economy expanded at an annual rate of 4.6% in the spring, the fastest pace in more than two years.
The growth in the April-to-June quarter, which is a sign that companies are investing more and households are spending more, was in sharp contrast to a decline of 2.1% for the first three months of the year, which included unusually harsh winter weather. On the commodity markets, the November crude contract was up US$1.01 at US$93.54 a barrel. December gold bullion dipped US$7.10 to US$1,214.10 an ounce and December copper added a US1¢ to US$3.04 a pound.