TSX surges 179 points amid solid earnings reports
TORONTO The Toronto stock market registered a solid, triple digit gain Wednesday amid positive earnings reports from heavyweights Barrick Gold (TSX:ABX) and Canadian Pacific Railway (TSX:CP.
The S composite index surged 179.49 points, or 1.48 per cent, to 12,270.43 as investors bought into resource stocks knocked down this month amid signs of slowing economic growth. The move went a long way toward clawing back last week steep 2.2 per cent market drop, triggered by data showing slowing economic conditions, particularly in China.
Barrick posted US$923 million or 92 cents per share of adjusted earnings in the first quarter, down from US$1.1 billion or $1.10 per share. Net income before adjustments was $847 million or 85 cents per share.
Barrick results beat the consensus estimate of 85 cents per share on $852 million of adjusted earnings and 81 cents per share on $865 million of net income. Its shares were up $1.37 or 7.61 per cent to C$19.38, after hitting a 20 year low last week as bullion prices plunged to their lowest levels in more than two years.
Barrick also plans to cut at least US$500 million from spending on major projects this year and may sell non core assets in response to lower prices and profit experienced in the first quarter.
commodity investors are (worried) by the fact that cash costs in most commodity industries have been going up, said Gareth Watson, vice president, investment management and research, at Richardson GMP Ltd.
have been worried about that. So it's being addressed and we're seeing some progress to see those costs decline (and) that can only be viewed positively. Pacific reported quarterly net income of $217 million or $1.24 per share, while revenue was up nine per cent to a quarterly record of $1.495 billion. The railway's operating ratio, a key measure of efficiency, improved to 75.8 per cent, which Canadian Pacific said was a record for the company.
CP chief executive Hunter Harrison said he's happy with the progress but not finished with transforming the company. Its stock lost early momentum and dropped $1.50 to $124.73, well above its 52 week low of $71.61. Most of the gains have taken place since last September and expectations for CP are high.
The Canadian dollar was up 0.05 of a cent to 97.5 cents US. indexes were generally weak as traders balanced disappointing durable goods data with a strong report from aircraft maker Boeing, and a weak profit forecast from consumer products maker Procter Gamble.
The Dow Jones industrials was 43.16 points lower to 14,676.3, the Nike Air Jordan Nasdaq was up 0.32 of a point to 3,269.65 and the S 500 index inched up 0.01 of a point to 1,578.79.
The Commerce Department says orders for durable goods declined 5.7 per cent in March, after a 4.3 per cent gain the previous month. February's figure was revised lower.
The metals and mining sector ran up almost 4.2 per cent with buyers also encouraged by a bullish outlook on copper prices.
May copper closed up six cents to US$3.16 a pound after Goldman Sachs said it expects prices for the metal Air Max Thea Australia to rebound in the next three months, aided by Chinese growth in the second half of the year.
Sherritt International Corp. (TSX:S) had $23.1 million of net earnings, or eight cents per share, down from $32.4 million or 11 cents per share in the year earlier quarter. Revenue was $286.5 million, down from $359.4 million and its shares were 13 cents lower at $4.32.
The Barrick results helped push the gold sector up about 4.2 per cent, as did rising gold prices. The June bullion contract gained $14.90 to US$1,423.70 an ounce, its highest close since April 12. Goldcorp Inc. (TSX:G) was up $1.81 to C$30.25. and speculation built that the European Nike Roshe Run Central Bank will cut interest rates in order to stimulate the eurozone economy. Canadian Natural Resources (TSX:CNQ) ran up 72 cents to C$30.24. Energy Department said crude oil supplies rose by 900,000 barrels, far less than the 1.4 million barrels that economists expected.
Cenovus Energy Inc. (TSX:CVE) reported a first quarter profit of $171 million as it was hit by unrealized hedging and foreign exchange losses. Its shares gained 61 cents to $29.36.
P the maker of Tide detergent and Gillette razors, dropped 6.57 per cent to $77.12 after its profit forecast missed expectations from financial analysts who follow the company. A mixed response to the company's new products is weighing on its prospects.
Apple shares headed downwards after the company handed in earnings and revenue results that narrowly beat estimates. At the same time, the company also said revenue for the current quarter could fall from the year before, which would be the first decline in many years. Nike Air Max Thea Apple CEO Tim Cook also suggested that the company won't release any new products until the fall.
The tech giant share price has slid more than 42 per cent from its peak in September. Its shares were down a slight Nike Sb 0.16 per cent to US$405.46 on Wednesday.
Vagner Vidal/INS News Agency
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