TSX closes slightly higher, markets stabilize after steep decline
TORONTO - The Toronto stock market closed slightly higher Tuesday as the TSX stabilized a day after worries about global manufacturing performance helped send North American exchanges into a sharp sell-off.
The S&P/TSX composite index climbed 18.28 points to 13,504.48. The Canadian dollar was up 0.13 of a cent to 90.24 cents US.
U.S. indexes racked up a solid gain despite data out Tuesday showing that U.S. factory orders dropped 1.5 per cent in December. But the decline was smaller than the 1.8 per cent dip that had been expected.
The Dow Jones industrials was ahead 72.44 points to 15,445.24, the Nasdaq gained 34.56 points to 4,031.52 and the S&P 500 index climbed 13.31 points to 1,755.2.
Stocks plunged Monday after data showed the U.S. manufacturing sector continued to expand in January but at a slower pace than expected.
Other data showed a similar performance for China's manufacturing sector, which added to anxieties about emerging markets.
These negative developments come at a time when the U.S. Federal Reserve is cutting back on a key stimulus measure â€”bond purchases that have kept long-term rates low and supported a strong rally on stock markets.
The withdrawal of stimulus is also proving to be difficult for emerging markets that had benefited from a steady inflow of cheap money courtesy of Fed easing. Now, they're being hit with steady outflows of that money, which in turn has pressured currencies and raised worries that economic problems in emerging countries could spread to developed markets.
Some analysts suggest markets that benefited strongly from the Fed's loose monetary policy have been ripe for a correction. The S&P 500 rocketed more than 30 per cent last year but is already down 5.75 per cent from the start of 2014.
"If the markets hadnâ€™t had the big run, they would be more immune to bad news," said Kash Pashootan, portfolio manager at First Avenue Advisory in Ottawa, a Raymond James Company.
"The market will not grant a whole lot of patience with bad news because of the fact weâ€™re paying top dollar for (stocks)."
The tech sector led advancers, up 1.22 per cent.
The energy sector rose 0.76 per cent as March crude in New York gained 76 cents to US$97.19 a barrel.
But Suncor Energy (TSX:SU) shares lost 63 cents to $35.01 after the energy giant posted quarterly operating earnings of $973 million, or 66 cents a share, 12 cents short of expectations. It also hiked its dividend 15 per cent to 23 cents a share.
The TSX gold sector climbed about 0.67 per cent while April gold declined $8.70 to US$1,251.20 an ounce.
The metals and mining group advanced 0.26 per cent as March copper added a cent to US$3.19 a pound.
Industrials were also positive as WestJet (TSX:WJA) gained 85 cents to $25.70 as the carrier posted $67.8 million of quarterly net income, or 52 cents per diluted share, which met expectations. WestJet also raised its quarterly dividend by 20 per cent to 12 cents a share.
Financial and telecom stocks led TSX decliners.
But Atlantic regional telco Bell Aliant Inc. (TSX:BA) gained 53 cents to $25.62 as adjusted earnings came in at 38 cents a share, beating estimates by three cents.
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