EARNINGS DRIVE STRONG WEEK ON TSX
TORON TO • The Toronto stock market registered a solid gain to cap a positive week on Friday, with the TSX powered by earnings news and positive manufacturing data from China.
The S&P/TSX composite index was up 74.67 points at 13,399.42 in an advance spread across all sectors save for minor declines in tech and health-care stocks.
The Canadian dollar was down 0.27¢ to US95.65¢, lower for a third day in the wake of a decision by the Bank of Canada to remove its tightening bias and downgrade its economic forecast. The move has led analysts to believe that interest rate hikes are off the table until 2015, leaving the loonie to fall 1.5¢ this week.
U.S. indexes were higher amid well-received earnings reports from Amazon and Microsoft.
The Dow Jones industrials closed up 61.07 at 15,570.28, the Nasdaq ran up 14.4 points to 3,943.36 and the S&P 500 index rose 7.7 points to 1,759.77.
After the close Thursday, Amazon.com posted a quarterly loss of US$41-million, or US9¢ per share, matching analyst expectations. Revenue jumped 24% to US$ 17.09billion against expectations of US$ 16.76billion and its stock surged US$31.18, or 9.39%, to US$363.39.
Microsoft’s net income in three months through Sept. 30 grew 17% to US$ 5.24billion, or US62¢ per share, from US$ 4.47billion, or US53¢ per share, a year ago. That beat the US54¢ expected by analysts. Revenue rose 16% to US$18.53-billion, also beating the US$17.79-billion analysts had been expecting and its shares were ahead US$2.01, or 5.96% or, to US$35.73.
It was a quiet day for earnings out of Canada after a week that saw positive earnings reports from the likes of Teck Resources, Goldcorp, Canadian National Railways and Canadian Pacific Railway.
“Some good numbers are coming out of corporations and then the international markets (and) the eurozone are starting to look better,” said Sadiq Adatia, chief investment officer at Sun Life Global Investment.
“The confidence is starting to improve from that standpoint and heading into the new year, people are not seeing anything that might pop up that might derail this rally right now.”
The TSX ended the week up 1.24%, leaving the Toronto market up almost 7% year to date.
CP was in focus Friday after its biggest shareholder sharply narrowed its position. Bill Ackman’s Pershing Square Capital Management has sold about a third of its holdings in the railway.
CP, which reported a record quarterly profit on Wednesday, said the hedge fund has sold 5.96 million CP shares for about US$140 a share, bringing the total divestment so far to seven million shares. On Friday, CP shares added $2.09 to $150.04, which is more than triple their level when Pershing Square began building up its stake in the railway.
The utilities sector led advancers, up 1.27%. The interest rate-sensitive sector has been under selling pressure since June amid speculation over when the U.S. Federal Reserve may start to wind down its monthly US$85-billion of bond purchases.