Earnings news drives tsx lower
The Toronto stock market closed lower Wednesday amid a slew of earnings news and negative moves in commodity prices.
The S&P/TSX composite index declined 13.74 points to 12,775.28 while the TSX Venture Exchange was up 5.34 points at 1,204.28.
The Canadian dollar gained US0.09¢ to US99.82¢.
U.S. indexes were mixed as January retail sales met expectations, with the Dow Jones industrials down 35.79 points to 13,982.91. The Nasdaq was 10.39 points higher at 3,196.88, supported by Amazon. com Inc., which has struck a deal with CBS Corp. to expand the networks’s content made available to Amazon’s Prime video streaming service.
Amazon stock ran up 4.16% to US$269.47. The S&P 500 index edged up 0.9 of a point to 1,520.33.
U.S. retail sales ticked up 0.1% last month after a 0.5% rise in December. January’s increase was in line with expectations and was the smallest in three months after higher taxes cut into the wages of Americans.
“However, given continued job gains through the start of this year, we are assuming that this slowing in sales will prove temporary and that greater strength will emerge going forward,” said RBC assistant chief economist Paul Ferley.
Analysts think that trading is taking place amid rising caution as a March 1 deadline looms that would see steep automatic spending cuts take effect to the tune of US$85 billion.
“I think there is some reluctance to do much. I think that’s why our market has more or less, the last couple of weeks or so, hasn’t done a darned thing,” said Fred Ketchen, manager of equity trading at Scotia Capital. “It’s teaching everybody to have a little bit more patience than they would like to have.”
On Wednesday, Jacob Lew, President Barack Obama’s nominee for Treasury secretary, urged Congress to avoid those cuts, warning they would impose “self-inflicted wounds to the recovery and put far too many jobs and businesses at risk.”
Talisman Energy Inc. recorded US$367 million or 37¢ per share in quarterly net income, beating forecasts of 16¢ a share. But the gain was mainly due to disposal of some assets and the company continued to feel the effects of low natural gas prices. Talisman posted revenue of $1.6 billion, which was $300 million less than what was expected. Its shares erased early losses and gained 26¢ to $12.82.
Thomson Reuters posted US$497 million of adjusted earnings, or 60¢ per share in the latest quarter, compared with US$445 million or 54¢ per share in the fourth quarter of 2011.