Toronto stock market little changed; BlackBerry reports surprise $23M Q1 profit
TORONTO - The Toronto stock market was barely changed Thursday as traders continued to digest the latest policy announcements from the U.S. Federal Reserve.
The S&P/TSX composite index inched up 2.97 points to settle at 15,112.22, adding to its record close on Wednesday which came six years to the day of the previous record set in June 2008, just before the Great Recession sent stocks tumbling. The loonie gained 0.23 of a cent to 92.40 cents US.
Wall Street was also muted as markets assessed Wednesday's Fed statement, which hinted that the central bank wasn't too worried about inflation but gave no signs on when it might start raising interest rates. The Dow Jones industrials rose 14.84 points to 16,921.46, the Nasdaq dipped 3.51 points to 4,359.33, while the S&P 500 index added 2.50 points to 1,959.48.
Andrew Pyle, senior wealth adviser at Scotia McLeod in Peterborough, Ont., said both Bay Street and Wall Street seem to be pulling back a bit as traders realize that the Fed statement did not necessarily warrant sending stocks higher.
"The reaction to the Fed announcement was a knee-jerk reaction," Pyle said. "If we look at what the Fed is producing in terms of material behind its decision, the markets should not have rallied to the extent that it did. The fed officials are still looking at tightening policy, they're still tapering, quantitative easing and, going into 2015, there is going to be less stimulation for stock markets."
As expected, the Fed also announced it would continue to reduce its monthly bond buyback program by US$10 billion to US$35 billion a month starting in July, on signs of a steadily growing U.S. economy.
On Thursday, the Conference Board said its index of leading indicators for the American economy increased 0.5 per cent last month, the fourth consecutively monthly increase for the measure, which attempts to gauge the economy's future health.
In corporate news, BlackBerry (TSX:BB) posted a surprise US$23-million profit in its first quarter, which beat analyst expectations and showed that efforts the company has made to revamp its smartphone business are making headway.
BlackBerry CEO John Chen said the Waterloo, Ont., company plans on launching a new keyboard smartphone called the BlackBerry Passport in September. It will also continue to dedicate more resources to serving business and public sector customers after a failed attempt to compete with Apple's iPhone in the consumer market. Shares in BlackBerry gained more than nine per cent or 84 cents to close at C$9.84 in Toronto.
Meanwhile, commodity markets were higher amid growing geopolitical instability. Traders bought into gold, sending the price of August bullion up $41.40 to US$1,314.10 an ounce.
Pyle said traders are moving into the precious metal as many expect continued volatility in the stock markets going into the summer due to fighting in eastern Ukraine between pro-Russian insurgents and government forces and the situation in Iraq.
U.S. President Barack Obama said he was dispatching up to 300 U.S. military advisers to help quell the insurgency in Iraq. Though not specifically mentioning airstrikes, Obama also said he was leaving open the possibility of "targeted and precise military action" in the future.
The July crude contract added 46 cents to US$106.05 a barrel while July copper added two cents to US$3.08 a pound.
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