TSX up amid slew of earnings, Fed says growth in economic activity picking up
TORONTO - Strong earnings reports from the consumer and information technology sectors helped push the Toronto stock market higher Thursday.
The S&P/TSX composite index gained 68.76 points to 14,651.87.
The Canadian dollar was down 0.08 of a cent at 91.24 cents US.
U.S. indexes were higher as the Federal Reserve wrapped its two-day interest rate meeting and judged the American economy strong enough to allow further easing of the central bank's bond purchases, cutting the monthly purchases by another $10 billion to $45 billion.
The Fed also reaffirmed its plan to keep short-term interest rates low to support the economy â€œfor a considerable timeâ€ after its bond purchases end, likely late this year.
It also said that growth in economic activity has picked up recently.
That assessment came on the same day that data came out showing U.S. economic growth for the first quarter fell far short of expectations as a result of severe winter weather. Gross domestic product grew by only 0.1 per cent, against the 1.2 per cent annualized gain that had been expected.
The Dow Jones industrials climbed 45.47 points to a fresh record high close of 16,580.84, the Nasdaq gained 11.02 points to 4,114.56 while the S&P 500 index rose 5.62 points to 1,883.95.
It was a heavy day for Canadian earnings news as Loblaw Cos. Ltd. (TSX:L) said adjusted net earnings went up by 3.7 per cent to $139 million or 49 cents a share in the first quarter, beating estimates of 46 cents. The grocer also boosted its dividend about 2.1 per cent to 24.5 cents a share and its stock was up $1.85 or four per cent to $47.65.
Analysts note the positive showing comes after the company spent heavily in recent years on consultants and IT groups to put in systems to better track inventory.
"So for the last two or three years, they were running kind of below expectations because of that heavy spending," said Wes Mills, chief investment officer Scotia Private Client Group.
"And thatâ€™s all behind them now, so theyâ€™re clearly better able to execute and then increasingly the focus now is on their acquisition of Shoppers Drug Mart as well."
Barrick Gold Corp. (TSX:ABX) posted a steep drop in its first-quarter adjusted net earnings to US$238 million, or 20 cents per share, from US$923 million, or 92 cents per share a year ago due to a decrease in metal prices and lower gold sales volumes. Results beat analyst estimates by a penny. Revenues were US$2.6 billion compared with $3.4 billion for the comparable year-earlier period. Its shares dipped 22 cents to C$19.13 amid lower gold prices Wednesday.
The information technology sector also lifted the TSX after IT services company CGI Group (TSX:GIB.A) said adjusted net earnings were up 28.6 per cent at $229.6 million, or 72 cents per diluted share, beating analystsâ€™ expectations of 68 cents and its shares jumped $1.44 or 3.78 per cent to $39.52. Revenues were up seven per cent to $2.7 billion.
The TSX base metals sector edged 0.58 per cent higher while July copper moved five cents lower to US$3.03 a pound.
The energy sector was down 0.65 cent with June crude in New York losing $1.54 to US$99.74 a barrel.
The gold sector declined 0.79 per cent as June bullion ticked 40 cents lower to US$1,295.90 an ounce.
In the U.S., Twitter shares plunged 9.13 per cent in New York. The social networking site's quarterly earnings and revenue surpassed analyst expectations but investors were disappointed over Twitterâ€™s growth in users, which came in at 255 million monthly users, about two million lower than analyst consensus.
Read more Business News
- Police look for bank robberKelowna
- Fall in creek leads to DUIKelowna
- Alleged killer accused of lying BC
- Unruly passengers in custodyCanada
|QHR Technologies Inc||1.19||0.00|
|Anavex Life Sciences||0.24||-0.01|
|Copper Mountain Mining||2.96||-0.07|
|Sunrise Resources Ltd||0.025||0.00|
|Mission Ready Services||0.24||-0.01|
There are several things to consider when deciding how much home to buy. 1. Draw up a budget including the new mortgage payments. While the rules used by most lenders require that the mortgage paym...
Photo: ContributedI would call it a joy ride... You see a planned project or business has a destination. It may be an ongoing revenue stream, it may be a business value or an exit strategy. If you don...
Establishing a joint account may seem like a great strategy at first glance. However, there are many factors that must be considered before taking this action. This article will explore the use of &ls...