TSX HEADS HIGHER AS COMMODITIES RISE
TORONTO • The Toronto stock market closed higher Friday as energy stocks advanced while oil prices hit a 16-month high and traders took in a mixed batch of U.S. earnings.
The S&P/TSX composite index gained 56.28 points to 12,685.13.
The Canadian dollar was up 0.08 of a cent to US96.46¢ as new data showed that inflation was well under control in June. Statistics Canada said that inflation came in at an annualized rate of 1.2%, in line with economists’ expectations.
U.S. indexes were generally lower after Google Inc. and Microsoft Corp. both missed forecasts for earnings and revenue, while General Electric Co. beat expectations.
The Dow Jones industrials lost 4.8 points to 15,543.74, the Nasdaq was down 23.67 points to 3587.61 and the S&P 500 index edged 2.72 points higher to 1692.09.
GE earned $3.13 billion or 30¢ a share in the latest quarter, up from $3.11 billion a year earlier. Earnings ex-items came in at 36¢, a cent higher than estimates. Revenue fell four%, to $35.12 billion. GE shares were up 4.6% in New York.
Google earned $3.2 billion, or $9.54 per share, up 16% from $2.8 billion a year ago. Earnings were $9.56 per share ex-items, lower than the $10.78 that analysts had forecast. Google handed in revenue of $14.11 billion versus expectations of $14.42 billion. Google’s average ad rate fell by 6% from the same time last year during the quarter, marking the seventh consecutive quarter of falling ad prices. Its shares fell 1.55% .
But stocks around the world have had a generally solid week especially after U.S. Federal Reserve Chairman Ben Bernanke indicated that the scale and scope of the central bank’s monetary stimulus may remain in place for longer than many in the markets had been predicting.
At the same time, markets including the TSX are getting a lift from improving U.S. economic conditions, seen lately in strong housing sector numbers and improving job creation.
“We have seen upward growth in the U.S., not stellar growth but continuous growth and ... that’s leading the U.S. market higher and pulling the Canadian market higher,” said Jeff Bradacs, a portfolio manager at Manulife Asset Management, adding that the second-quarter earning season has generally pleasantly surprised investors.
“What we have seen this week is a number of large U.S. companies’ financials and industrial companies that beat expectations and that’s helped continue the rally on the market.”
Commodity prices advanced with August bullion up US$8.70 to US$1,292.90 an ounce on the New York Mercantile Exchange, and the gold sector moved up about 4%. Barrick Gold Corp. climbed 82¢ to $17.16.
August crude edged up US1¢ to US$108.05 a barrel after rising as high as US$109.32, the highest price since March 1, 2012.
Crude’s advance this week has been underpinned by another sizeable decline in U.S. oil supplies. U.S. crude inventories fell by 6.9 million barrels last week, bringing the three-week decline to 27.1 million barrels. Prices are up 15% over the last four weeks.