TSX FLAT DESPITE STRONG EARNINGS
TORON TO • The Toronto stock market hardly changed Thursday despite encouraging Chinese manufacturing data and strong earnings reports.
The S&P/TSX composite index climbed 0.07 of a point to 15,394.45 as China’s manufacturing rose in July to its highest level in 18 months. The preliminary HSBC purchasing managers’ index rose to 52.0 in July from 50.7 in June. A reading above 50 indicates expansion.
The Canadian dollar declined 0.14 of a cent to US93.07¢.
U.S. markets also stalled as traders digested data showing new home sales in the United States plunged 8.1% last month.
The Dow Jones industrials dipped 2.83 points to 17,083.8, the Nasdaq gave back 1.59 points to 4472.11 and the S&P 500 index edged up 0.97 of a point to 1987.98.
Meanwhile, investors waded through a deluge of earnings reports.
In Canada, Teck Resources Ltd. reported a second-quarter net profit of $80-million, or 14¢ share, compared with $143-million (25¢) a year ago. Adjusted profit, excluding items, was $72-million (13¢), a penny better than estimates, and its shares ran up 32¢ to $25.94. However, one big reason for the improvement at the Vancouver-based mining company was a cost-cutting program launched two years ago that Teck said has exceeded its initial goals.
“What we are seeing is bottom-line growth and a lot of cost cutting, slimming down,” said Allan Small, senior adviser at HollisWealth.
“So, hopefully we’ll see topline growth as emerging economies continue to rebound.”
Loblaw Cos. Ltd. posted a net quarterly loss of $456-million ($1.13), with results hit by costs involving the acquisition of Shoppers Drug Mart. Adjusted earnings of 75¢ a share beat estimates by 8¢ a share and its stock advanced 55¢ to $51.89.
Rogers Communications Inc. reported second-quarter net income of $405-million, or 76¢ per diluted share, down 24% from the same quarter of 2013. Rogers shares gained 48¢ to $42.88 as its adjusted net income was $432-million (84¢).
In the U.S., there were major disappointments as recall costs chopped US$1.5billion from General Motors Co.’s bottom line in the second quarter, cutting its net income by 85% to US$190-million (US11¢). GM shares fell 4.46% to US$35.74.
Construction-equipment maker Caterpillar fell 3.08% to US$105.04 as quarterly profit rose 4.1%, which beat expectations. However, its revenue fell short of forecasts.
The tech sector led advancers, up 1.4%, while BlackBerry Ltd. gained 61¢ or 5.79% to $11.15 after the Financial Times reported the company is in talks with rival technology groups about partnerships to compete with the newly forged alliance between Apple and IBM.
Base metals rose 0.5% as the Chinese manufacturing data sent September copper up US6¢ to US$3.27 a pound. The energy sector slipped 0.11%, while crude oil declined US$1.05 to US$102.07 a barrel.
The gold sector was the biggest decliner, down about 1.45%, while bullion faded US$13.90 to US$1,290.60 an ounce.