Source: The Canadian Press
The Toronto stock market closed little changed as bank stocks fell amid worry that Ireland will have to get a financial bailout while base metal stocks picked up amid record high copper prices.
The S&P/TSX composite index lost 7.9 points to 12,934.74 and the TSX Venture Exchange rose 16.95 points to 2,039.28.
The Canadian dollar moved lower on international markets with commercial banks and the Bank of Canada closed because of Remembrance Day. Late in the afternoon, the currency was down 0.33 at 99.67 cents US a day after closing at parity with the U.S. dollar for the first time since mid-April.
The U.S. dollar also rose against the euro and other currencies amid worries that Europe’s debt crisis was getting out of hand.
Ireland is currently at the epicentre of those concerns amid fears Dublin will not be able to get a handle on its massive debts and require a Greek-style financial bailout from its partners in the eurozone and possibly the International Monetary Fund.
That view is increasingly evident in the bond markets, where interest rates on Irish government bonds have been rising on an almost daily basis to their highest levels since the euro was introduced in 1999. On Thursday, the yield on 10-year bonds approached 9% for the first time and the spread between the benchmark German rate spiked towards 7%.
The latest round of concern gave investors a chance to cash in on some of the strong gains racked up from the end of August, when U.S. Federal Reserve chairman Ben Bernanke said the central bank was prepared to do whatever it took to keep the economic recovery on the rails, to last week’s move by the Fed to institute another round of stimulus.
“We have had a fantastic run-up since the end of August — it’s been 13% from then to last week where we hit a high,” said Phillip Petursson, director of institutional equities at MFC Global Investment.
“So, what I think you get out of Cisco and out of Ireland is just an opportunity to do some profit-taking and I think that’s what we’re seeing right now.”
Financials led the way lower on the TSX, down 0.8% with Scotiabank (TSX:BNS) 54 cents lower at $53.85 and Royal Bank (TSX:RY) -off 55 cents at $53.70.
Tech stocks were weighted by a disappointing outlook from Cisco Systems Inc., which sent its shares plunging 16% to US$20.52. For the second straight quarter, Cisco has also provided investors with a disappointing sales forecast. The network equipment maker said its revenue will rise by less than half of what analysts had predicted for its November through January quarter.
Celestica (TSX:CLS) fell 30 cents to C$8.95 while Open Text Corp. (TSX:OTC) lost 63 cents to $44.57.
The December crude contract on the New York Mercantile Exchange was unchanged at US$87.81. The energy sector was little changed and Suncor Energy (TSX:SU) lost 27 cents to C$36.06.
The base metals sector was the biggest advancer, up almost 2% as the December copper contract in New York was ahead five cents to US$4.02 a pound.
The metal also reached a record high on the London Metal Exchange Thursday, with the copper contract three months down the road hitting a record US$8,966 a tonne, compared with $8,760 Wednesday, partly because of falling inventories. Prices also rose in response to data that showed that growth in Chinese factory output and retail sales eased in October, though both still rose at double-digit rates over a year earlier.
Teck Resources (TSX:TCK.B) was up $1.96 at C$50.35 while First Quantum (TSX:FM) was ahead $2.80 to $93.80.
Ivanhoe Mines Ltd. (TSX:IVN) reported that quarterly net losses were US$24.9 million or five cents per share, compared to a loss of $69.8 million or 18 cents per share a year ago. Revenues tumbled to $6.6 million from $11.9 million and its shares were down 15 cents at $26.11.
The gold sector advanced as bullion gained $4 to US$1,403.30 an ounce. Barrick Gold Corp. (TSX:ABX) climbed 23 cents to C$52.07.
Meanwhile, G20 leaders are holding a two-day meeting in Seoul, South Korea amid ongoing tensions in the currency markets, fears of a rising tide of protectionism and big divergences in trade positions.
Expectations are fairly low that the leaders will come up with any significant agreement.
“I don’t think it’s weighing on markets at all,” Petursson said.
“There’s nothing that they can decide there. If anything, it’s just going to be a lot of finger-pointing in terms of currency manipulation between the strong versus the weak.”
New York’s Dow Jones industrial average dropped 73.94 points to 11,283.1.
The Nasdaq composite index fell 23.26 points to 2,555.52 48 while the S&P 500 index lost 5.17 points to 1,213.54.
In other earnings news, Canadian Tire Corp. (TSX:CTC.A) shares jumped almost 7% as it reported third-quarter earnings rose 21% to $103.2 million from $85.4 million. Revenues increased 2.6% to $2.51 billion.
The retailer’s shares gained $4.03 to $62.93 as it also announced its quarterly dividend payments would increase to 27.5 cents next year from 21 cents each quarter this year.
Tim Hortons earned $73.8 million in the third quarter or 42 cents per share — up more than 20% from $61.2 million or 34 cents per share in the same period last year.
But analysts had been expecting 53 cents per share or $92.71 million of net income, according to figures compiled by Thomson Reuters. The iconic Canadian restaurant operator is also closing 36 U.S. stores and its shares dipped 33 cents to $39.07.
Finning International Inc. (TSX:FTT) says the second half of the year is shaping up to be much better than expected, powered by an exceptional third quarter. The comment from the world’s largest Caterpillar heavy equipment dealer came a day after it reported earnings of $61 million in the third quarter, up from $26 million a year earlier and its shares gained 48 cents to $25.48.