TSX CLOSES UP DESPITE DROPS FOR GROCERS

TORONTO • The Toronto stock market moved higher Wednesday as gains in energy and financial shares helped balance out earnings misses from two of Canada’s biggest grocers and lingering disappointment that a meeting of Chinese leaders failed to yield hoped-for economic reforms.

The S&P/TSX composite index advanced 44.62 points to 13,370.66, with downward pressure coming from mining stocks as China concerns sent copper prices falling for a second day.

Loblaw Cos. Ltd. fell $3.61, or 7.55%, to $44.23 as the grocer lowered its 2013 forecast for profit growth due to thinner margins in the second half of the year. Loblaw also said its quarterly net income was $154-million, or 55¢ per share, which was down 28.6% a year earlier. Ex-items, earnings were $220-million (78¢) down 3.7% a year ago. However, revenue was up 1.9% to $10-billion.

Metro Inc. shares lost $3.71, or 5.65%, to $62 after the company posted adjusted fully diluted net earnings per share from continuing operations of $1.19, up 4.4% from a year ago. However, sales were down 1.1% to $2.6-billion while same-store sales fell 1.8%.

“It’s competitive, we’re seeing square footage increase by some of the non-traditional players in that grocery space, whether it’s Wal-Mart, Target, others,” observed Garey Aitken, chief investment officer at Franklin Bissett Investment Management.

“And we know what demand is like. It’s pretty mature. It doesn’t go up much, so it’s just created a very challenging environment for them to contain costs to maintain margins.”

The Canadian dollar was up US0.28¢ to US95.58¢, a day after Finance Minister Jim Flaherty said the Conservative government will end seven years of federal deficits in 2015 with a $3.7-billion surplus. The new projection is nearly $3-billion better than the March budget forecast.

U.S. markets were higher with two key indexes hitting record highs — the Dow Jones industrial average ran ahead 70.96 points to 15,821.63, and the S&P 500 index gained 14.31 points to 1,782. Nasdaq climbed 45.66 points to 3,965.58.

Traders also looked to confirmation hearings for Janet Yellen as the new U.S. Federal Reserve chief on Thursday, which could provide a fresh cue for financial markets. Investors will look to her testimony for indications about when the Fed might begin reducing its massive monetary stimulus that has supported a strong rally on many stock markets and kept the lid on long-term rates.

Meanwhile, Communist party leaders in Beijing wrapped up a four-day meeting on the economy late Tuesday. Reform advocates had hoped for major economic changes but were disappointed. The ruling party only said that market forces would play a “decisive role” in China’s economy, an upgrade from “core role” assigned to the market.

Energy companies led advancers, up 0.86% as December crude on the New York Mercantile Exchange gained US84¢ to US$93.88 a barrel a day after falling to a five-month low. And the gold sector was ahead about 0.3% as the December bullion contract erased early gains to close down US$2.80 at US$1,268.40 an ounce.