Toronto stock market advances amid strong Chinese manufacturing data, earnings

TORONTO – The Toronto stock market registered a strong gain Thursday amid signs of an improving Chinese economy and earnings reports from the resource sector that beat expectations.

The S&P/TSX composite index was ahead 81.43 points to 13,324.75.

The Canadian dollar was down 0.38 of a cent to 95.92 cents US after falling almost nine-tenths of a cent Wednesday after the Bank of Canada indicated that interest rates hikes are even further away than thought while revising downward its economic forecast through 2015.

New York markets were higher amid solid earnings from automaker Ford, with the Dow Jones industrials ahead 95.88 points to 15,509.21 while the Nasdaq gained 21.89 points to 3,928.96.

The S&P 500 index edged up 5.69 points to 1,752.07 as Ford earned an adjusted profit of 45 cents per share — a record for the third quarter— as sales rose 12 per cent to US$36 billion. Ford sold 1.5 million vehicles in the quarter, up 16 per cent. Analysts had expected Ford to earn 37 cents per share and its stock rose 24 cents to $17.76.

Buyers were encouraged by an HSBC survey showing that China’s manufacturing activity was higher than expected in October.

HSBC’s main index rose to a seven-month high of 50.9 points from 50.2 per cent in September — anything above 50 indicates expansion. The consensus in markets had been for a more modest rise to 50.4.

The manufacturing data was released a day after markets were pressured by concerns over China’s banking sector — mainly due to a hot real estate market — that could prompt a tightening in monetary policy.

The gold sector led TSX advancers, up about 4.3 per cent while December bullion rose $16.30 to US$1,350.30 an ounce.

Goldcorp Inc. (TSX:G) helped power the component higher, advancing $1.19 to C$27.76 as the company posted net earnings of US$5 million, down from US$498 million in the same period last year amid rising costs and lower prices. That amounted to a penny per share for Goldcorp shareholders, compared with 61 cents per share last year. Revenue dropped to US$929 million from US$1.3 billion.

The Chinese data failed to boost copper prices. The base metals sector ran up 2.66 per cent even as copper closed unchanged at US$3.26 a pound after sliding seven cents Wednesday.

Teck Resources Ltd. (TSX:TCK.B) shares were ahead $1.13 to C$30.54 as the miner reported a third-quarter adjusted profit of $252 million, or 44 cents per share, which was far better than analyst estimates but down sharply from the same time last year as prices for all of its principal products have fallen.

“In terms of results, I mean great in terms of beating expectations, but does that automatically guarantee that next quarter is going to beat the street and the quarter after that?” asked Gareth Watson, vice-president Investment Management and Research at Richardson GMP Ltd.

“Not necessarily because I think it needs to be taken in context of what’s going on in the global economy but I have a positive outlook for investing in 2014 when it comes to that global growth outlook.”

December crude on the New York Mercantile Exchange moved up 25 cents to US$97.11 a barrel after sliding $1.44 Wednesday on data showing a much higher than expected buildup in U.S. inventories last week. The energy sector was ahead 0.88 per cent.

Cenovus Energy Inc. (TSX:CVE) reported its third-quarter operating earnings were $313 million, or 41 cents per share, missing estimates of 48 cents a share. But operating cash flow from oil production was up 40 per cent to $915 million, thanks to higher output and higher realized prices. Its shares added 14 cents to C$30.84.

The telecom sector was the weakest group, down 1.17 per cent as Rogers Communications’ (TSX:RCI.B) said that third-quarter adjusted net income was up one per cent from last year, rising to $501 million or 97 cents a share, a penny ahead of expectations. But operating revenue was slightly below estimates, growing two per cent to $3.22 billion and its shares declined $1.25 to $45.83.

A major loser on the TSX was Wi-LAN Inc. (TSX:WIN). Its stock plunged 92 cents, or 22.55 per cent, to $3.16 after a jury in Texas ruled Thursday against the Ottawa-based company in its patent infringement case against Apple Inc. Wi-LAN has licensed its intellectual property to more than 270 companies worldwide that are involved in the manufacture or sale of a wide range of communication and consumer electronics products.