The Toronto stock market headed for a positive open Thursday, supported by strong earnings reports and dividend hikes by some of Canada’s biggest banks and rising commodity prices.
The Canadian dollar rose 0.29 of a cent to 101.37 cents US.
U.S. futures were positive with the Dow Jones industrial futures up 25 points to 12,962, the Nasdaq futures rose 11 points to 2,634 and the S&P 500 futures advanced 2.1 points to 1,366.5.
TD Bank (TSX:TD) boosted its dividend nearly six per cent to 72 cents while posting lower net income from a year ago. The bank’s first-quarter net income dropped five per cent to $1.48 billion, or $1.55 per share.
But TD surpassed analyst expectations with diluted earnings per share of $1.86, 10 cents above the analysts’ estimates.
Royal Bank of Canada (TSX:RY) is raising its dividend six per cent to 57 cents a share amid a sharp drop in profits that were affected partly by dramatically lower earnings in its capital markets division. Its net income fell five per cent to $1.86 billion, or $1.21 per share.
The results beat analyst expectations on a cash diluted basis of $1.25 per share, compared to consensus expectations of $1.13.
National Bank (TSX:TD) also posts results Thursday.
Elsewhere on the earnings front, transportation giant Bombardier (TSX:BBD.B) posted net income of US$214 million or 12 cents per share for the fourth quarter, down from $295 million or 16 cents per share a year earlier. Quarterly revenues totalled $4.3 billion, compared to $5.6 billion in the previous year.
Oil prices were steady, slightly above the US$107 mark. The April contract on the New York Mercantile Exchange added one cent to US$107.08 a barrel.
Prices had gained 52 cents Wednesday despite data showing that U.S. crude supplies grew more than expected last week amid weak gasoline demand.
Metal prices also advanced following good news on China’s economy with the May copper contract up a cent to US$3.89 a pound.
China’s manufacturing sector gained momentum in February, helped by strength in new orders, export demand and production. The state-affiliated China Federation of Logistics and Purchasing said its purchasing managers index, or PMI, rose 0.5 points to 51.0 from January’s 50.5 and December’s figure of 50.3 in a third straight month of steady improvement.
Signs of an improving U.S. economy and hopes that China will loosen lending requirements to encourage growth boosted copper prices about 2.5% during February. China is the world’s biggest consumer of copper, viewed as an economic bellwether as it is used in so many businesses.
Bullion prices stabilized after tumbling almost US$80 on Wednesday as the latest U.S. economic data and comments by U.S. Federal Reserve chairman Ben Bernanke sent a signal that the central bank won’t be embarking on another round of quantitative easing, which has involved printing money in order to buy government bonds.
Gold prices have benefitted from past rounds of QE and speculation over further measures because of the inflation implications of such stimulus measures.
The April bullion contract on the Nymex gained $2.20 to US$1,713.50 an ounce.
North American stock markets finished lower on Wednesday after Bernanke said he was surprised by the scale of good news emerging about the U.S. economy. Investors concluded that the Fed won’t be pumping more money into the U.S. economy anytime soon and that interest rates may rise sooner than anticipated.
European markets were positive amid further signs of a struggling eurozone economy.
Figures earlier from the European Union’s statistics office Eurostat showed unemployment in the 17-country eurozone unexpectedly rose to 10.7% in January, a new record high since the creation of the euro in 1999. Eurostat also said eurozone inflation ticked up to 2.7% in February from 2.6% the month before. The rise takes inflation further above the European Central Bank’s target of keeping price increases at just below two per cent.
London’s FTSE 100 index gained 0.57%, Frankfurt’s DAX rose 0.63% and the Paris CAC 40 was up 0.8%.
Earlier in Asia, Japan’s Nikkei 225 index dropped 0.2%, having closed on Wednesday at its highest level since Aug. 2.
Mainland China shares were mixed in the wake of the Chinese manufacturing data as the Shanghai Composite Index closed down 0.1% and the smaller Shenzhen Composite Index rose 0.4%.
But Hong Kong endured a sell-off. The Hang Seng, which hit a seven-month high Wednesday, fell 1.4% as property shares faced a pounding after the Shanghai government announced that — contrary to earlier reports — property restrictions would not be eased on purchases of second homes.