TSX advances, gold stocks drag as bullion retreats on Fed easing, U.S. data

Photo: The Canadian Press. All rights reserved.

The Toronto Stock Exchange Broadcast Centre is shown in Toronto on June 28, 2013. THE CANADIAN PRESS/Aaron Vincent Elkaim

TORONTO - The Toronto stock market racked up a solid gain Thursday amid data showing improving economic growth in the United States.

The S&P/TSX composite index ran ahead 92.06 points to 13,735.28.

But the market was held back by gold stocks that fell alongside bullion prices following the U.S. Federal Reserve's latest tapering move and data showing U.S. economic growth came in at an annualized rate of 3.2 per cent.

The data raised confidence that growth in 2014 could come in at three per cent or better after growth for last year came in at only 1.3 per cent.

"With the tailwinds that seem to be at the back of the U.S. from energy to manufacturing to housing . . . people have grown more comfortable with the potential for actual acceleration of growth in the U.S. to that three per cent level," said Mark Bayko, vice-president and portfolio adviser at RBC Wealth Management.

The Canadian dollar gained 0.1 of a cent to 89.56 cents U.S.

New York's Dow industrials rose 109.82 points to 15,848.61, the Nasdaq climbed 71.7 points to 4,123.13 and the S&P 500 index was ahead 19.99 points to 1,794.19.

The Fed moved Wednesday to cut its bond purchases by another US$10 billion to $65 billion a month, the central bank's second such move to cut back on the stimulus program that has keep long-term rates low.

Investors have also been focused on quarterly earnings and outlooks over the past couple of weeks on hopes that a strong corporate showing will help stocks. Last year, the Fed stimulus helped the S&P 500 charge ahead about 30 per cent.

On Thursday, Potash Corp. of Saskatchewan (TSX:POT) shares lost 69 cents to C$34.89 as quarterly profit dropped 45 per cent from a year ago to US$230 million or 26 cents a share, five cents less than expected. Revenue of US$1.54 billion beat expectations of $1.4 billion.

Imperial Oil's profit amounted to $1.24 per share, well above analyst estimates of 89 cents per share under standard accounting but its shares headed 27 cents lower to $45.52.

In New York, Facebook jumped 14 per cent as the social media company reported results Wednesday that exceeded expectations.

The industrials sector led TSX advancers, up 1.84 per cent as Canadian National Railways (TSX:CNR) ran ahead $1.26 to $59.34 ahead of earnings which were posted after the close. Net profits increased by four per cent to $635 million or 76 cents per share, a penny less than analyst estimates as compiled by Thomson Reuters. CN also upped its quarterly dividend by 16 per cent to 25 cents.

Financials ran up 0.7 per cent as Manulife Financial (TSX:MFC) gained 37 43 cents to $20.87 .

The energy sector was ahead 0.47 per cent as the March oil contract on the New York Mercantile Exchange rose 87 cents to US$98.23 a barrel.

The gold sector fell about 2.43 per cent as the April bullion contract lost $19.70 to US$1,242.50 an ounce. Goldcorp (TSX:G) fell 71 cents to C$26.93.

Metal prices were lower with the March copper contract down one cent to US$3.23 a pound and the base metals sector was down 1.02 per cent. Teck Resources (TSX:TCK.B) fell 53 cents to C$27.21.