TSX moves lower amid mixed earnings reports, glum economic forecast
TORONTO - The Toronto stock market closed lower Tuesday amid a heavy slate of earnings and a forecast that sees slower global economic growth.
The S&P/TSX composite index declined 84.74 points to 14,612.29.
The Canadian dollar was ahead 0.61 of a cent to 91.92 cents US.
U.S. indexes were also well into negative territory with the Dow Jones industrials down 129.53 points to 16,401.02, the Nasdaq off 57.3 points at 4,080.76 and the S&P 500 index 16.94 points lower at 1,867.72.
The Organization for Economic Co-operation and Development said the global economy will grow by 3.4 per cent this year, down from its forecast of 3.6 per cent growth last November.
The OECD, a think-tank for the worldâ€™s most developed countries, cut Chinaâ€™s growth forecast this year to 7.4 per cent from 8.2 per cent in November. Meanwhile, the U.S. economy is forecast to grow 2.6 per cent this year against last Novemberâ€™s 2.9 per cent estimate.
The news is better for Canada: economic growth is projected to accelerate to 2.75 per cent by 2015.
On the earnings front, BCE Inc. (TSX:BCE) posted quarterly net earnings of $615 million, up 8.7 per cent from a year ago, led by growth in its wireless and media divisions. Adjusted net earnings were $626 million or 81 cents, up 4.5 per cent from a year ago and five cents better than forecast, but its shares lost 46 cents to $48.50 as revenue missed expectations.
Also, subsidiary Bell added 33,964 postpaid net wireless customers, mostly smartphone subscribers on two-year contracts, down from 59,497 in the same quarter last year.
"The story here is wireline is in a secular decline and wireless, with the price increases, it is showing signs of a slowdown," said Ben Jang, portfolio manager at Nicola Wealth Management in Vancouver.
"So, from an investment point of view, really, at these levels, the share price is quite fairly valued and I think you see that in the whole telecom space (and) sector valuations lack upside from here."
WestJet (TSX:WJA) recorded quarterly net earnings of $89.3 million, or 69 cents per diluted share, compared with $91.1 million, or 69 cents a year ago. WestJet says total revenue totalled $1.042 billion, a gain of 7.7 per cent over the same period of 2013. WestJet shares dropped 55 cents to $24.42.
The tech sector led TSX decliners, down two per cent with BlackBerry (TSX:BB) falling 33 cents to $8.35.
In New York, the rotation from expensive biotech and technology shares resumed and shares in Twitter plunged $6.90, or 17.8 per cent, to $31.85 after company insiders were allowed to sell stock for the first time since the companyâ€™s initial public offering in November. Facebook fell 4.4 per cent while Netflix shed 5.3 per cent.
The base metals sector dropped 0.94 per cent with July copper unchanged at US$3.06 a pound.
June bullion faded 70 cents to US$1,308.60 and the gold sector shed about 0.9 per cent.
The energy sector was off 0.24 per cent while June crude in New York added two cents to US$99.50 a barrel.
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