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Toronto stock market slightly higher as key commodities strengthen

TORONTO – The Toronto stock market ended Friday with a slight decline, closing out a bumpy trading session led mostly by commodities.

The S&P/TSX composite index fell 6.41 points to 12,147.28, while the TSX Venture Exchange inched up 1.18 points to 1,397.95.

The Canadian dollar was higher, up 0.27 of a cent to 100.75 cents US.

The session marked another round of uncertainty as traders ponder whether a spring pullback is in store.

Expectations are that upcoming data will give a sense of where the U.S. economy is headed, especially the report on U.S. gross domestic product due next Friday and the U.S. jobs report due May 4.

“We’re in a consolidation mode in the markets where we’ve been going one day up and one day down and nobody seems to have the conviction or the ability to drive the markets very far,” said Colin Cieszynski, market analyst at CMC Markets.

“We’ve had a huge rally and now markets have reasonably put in expectations.”

In earnings news, Canadian Pacific Railway Ltd. (TSX:CP) beat analyst expectations with a $142-million profit in the first quarter, or 82 cents per share. The results came in two cents better than analysts expected, according to a poll by Thomson Reuters.

The financial report comes several weeks before the company’s annual meeting at which CP management will face off against the company’s largest shareholder. Pershing Square Capital Management has been calling for the removal of CEO Fred Green and the installation of new representatives on the board of directors.

Shares of Canadian Pacific closed up 42 cents at $76.45.

Oil prices closed higher for the first time in two days, which sent the TSX energy sector 0.2 per cent higher. The May crude contract on the New York Mercantile Exchange gained 78 cents to US$103.05 a barrel.

Copper was down an eighth of a cent to US$3.688 a pound, and the base metals fell 0.04 per cent, while bullion gained $1.40 to US$1,642.80 an ounce, but the gold sector declined.

Statistics Canada reported Friday that the national inflation rate dipped seven-tenths of a point to 1.9 per cent — the first time since September 2010 that the rate has been below the Bank of Canada’s sweet spot of two per cent. Economists had anticipated a major retreat in the annual inflation rate, but the drop was even more dramatic than expected.

On Wall Street, the Dow Jones industrial average rose 65.16 points to 13,029.26, the Nasdaq was down 7.11 points at 3,000.45 and the S&P 500 index gained 1.61 points to 1,378.53.

In U.S. earnings, General Electric Co. said first-quarter profit fell 12 per cent, although it topped Wall Street estimates when some one-time items were excluded. The company reported earnings of US$3.03 billion, or 29 cents per share, compared with $3.4 million, or 31 cents per share, for the same period in 2011. Revenue slipped by eight per cent to $35.2 billion.

McDonald’s Corp. reported stronger first-quarter results on better sales of its value meals and specialty drinks. The report from world’s biggest hamburger chain was in line with analyst expectations, with net income rising seven per cent to $1.27 billion, or $1.23 per share, in the first three months of the year. That compared with a profit of $1.21 billion, or $1.15 per share, in the year-ago period.

Oil services giant Schlumberger Ltd. said its profit jumped almost 38 per cent in the first quarter on strong drilling activity in the Gulf of Mexico, North Africa and the Middle East. The Houston company, which provides a host of services for petroleum companies, reported earnings of US$1.31 billion, or 97 cents per share, for the first three months of the year. Revenue increased by nearly 22 per cent to $10.6 billion.

Microsoft Corp. shares rose a day after the software giant said fiscal third-quarter earnings declined slightly from a year earlier, but revenue rose due to stronger sales of the company’s Windows and business division products. Microsoft shares gained $1.41 to US$32.42.

In Canada, a Japanese company is investing $602 million to acquire a share of Encana Corp.’s extensive coalbed methane reserves in southern Alberta. Encana (TSX:ECA) said Toyota Tsusho Corp. will acquire a 32.5 per cent royalty interest in about 5,500 existing and future Encana coalbed methane wells. Encana shares dropped 10 cents to $17.90.

Meanwhle, investors concerned over whether the eurozone will fall back into disarray because of its government debt crisis were keeping an eye on a meeting of the Group of 20 leading economies in Washington.

Late in the day, the International Monetary Fund said it had raised more than US$430 billion in an effort to assure finance markets that it has sufficient firepower to handle any new problems among the heavily indebted countries of Europe.

IMF Managing Director Christine Lagarde said the total raised would nearly double the IMF’s available resources to make loans to countries in trouble.

Lagarde said that some countries, including Russia, India, China and Brazil had made private pledges, but said she did not want to issue public commitments until they had conferred with officials in their home capitals.