TSX up slightly amid mixed earnings, positive economic news

A major gainer was Tim Hortons Inc. (TSX:THI) even as profit fell to $103 million or 65 cents per share in the fourth quarter from $377.1 million or $2.19 per share in the same 2010 period when it booked a gain from the sale of its stake in joint venture Maidstone Bakeries. Quarterly revenues rose 21% to $779.8 million.

The coffee and doughnut chain also said it was increasing its quarterly dividend 23.5% to 21 cents and its shares gained $1.81 or 3.57% to $52.47.

Tims is aiming to grow same-store sales between three and five per cent in Canada and between four and six per cent in the U.S. It is also targeting a total of 250 to 290 restaurant openings this year.

“I’m amazed at the number of stores they plan to open in 2012,” said Ian Nakamoto, director of research at MacDougall, MacDougall and MacTier.

“Equally impressive is the forecast for same-store growth. That’s key, adding more stores but adding less profitable stores is not going to get investors interested. Not only is each store profitable but they’re going to add more of these profitable stores,” he said.

The Canadian dollar was up 0.28 of a cent to 100.24 cents US.

U.S. markets were higher as data showed that the American job market is improving and house prices are rising.

The number of people seeking unemployment insurance was unchanged last week at 351,000. The four-week average, which smooths week-to-week fluctuations, dropped for the sixth straight week to 359,000, the lowest since March 2008.

The Dow industrials was up 46.02 points at 12,984.69.

The Nasdaq gained 23.81 points to 2,956.98 and the S&P 500 index was up 5.8 points at 1,363.46.

Traders hope the improving data on jobless insurance claims will translate into a third straight month of job gains in excess of 200,000. The U.S. non-farm payrolls report for February comes out March 9.

Other data showed U.S. home prices gained 0.7% in December. However, they were down 2.4% for all of 2011.

In Toronto, the energy sector was up one per cent as the April crude contract on the New York Mercantile Exchange gained $1.55 to US$107.83 a barrel after other data showed that crude supplies rose by a smaller than expected 1.6 million barrels last week, about 100,000 barrels less than analysts had forecast. Suncor Energy (TSX:SU) gained 78 cents to C$36.39 while Canadian Natural Resources (TSX:CNQ) climbed 26 cents to $38.44.

Oil prices have shot up from US$96 at the beginning of the month over mounting tension over Iran’s nuclear program.

The gold sector was up about 0.5%, as bullion prices headed higher with the April contract up $15 to US$1,786.30 an ounce.

Shares in Alamos Gold Inc. (TSX:AGI) gained 15 cents to $20.10 as the miner increased its semi-annual dividend 43% to 10 cents per share. The miner also reported an increase in fourth-quarter earnings to US$21.3 million or 18 cents per share compared with US$18.3 million or 16 cents per share in the same prior-year period.

The base metals sector was slightly lower as the March copper contract was off three cents at US$3.81 a pound, still retaining most of a 13-cent surge from earlier in the week after China’s central bank moved to cut banks’ reserve ratios to loosen lending and encourage growth. China is the world’s biggest consumer of copper, which is viewed as an economic bellwether since it is used in so many businesses.

First Quantum Minerals (TSX:FM) was off 34 cents to C$22.85 while Ivanhoe Mines (TSX:IVN) gained 39 cents to $17.33.

Elsewhere on the earnings front, grocer Loblaw (TSX:L) was a major decliner, down $2.11 or 5.65% to $35.25 as quarterly profits rose five per cent to $174 million or 62 cents per share and revenue grew 3.6% to $7.37 billion. But it warned that the current year looks to be less profitable as the company expects to invest some $70 million in information technology and supply chain improvements.

“This is definitely a glitch,” said Nakamoto.

“They talk about incremental cost for IT and supply chain costs. I thought that was in the past because they had some problems with IT.”

It also plans to spend $40 million to continue developing its marketing or “customer proposition.”

“It’s a euphemism to me that there is tough competition out there, they have to cut prices, there’s no other way I read that,” added Nakamoto.

Home hardware and gardening retailer Rona Inc. (TSX:RON) posted a loss of more than $151 million in the fourth quarter as the company took restructuring charges to reflect weak markets and a plan to refocus the company. Rona shares slipped four cents to $9.35.

Meanwhile, lawyers say a Shanghai court has suspended proceedings in a lawsuit by a Chinese electronics maker against Apple Inc. over use of the iPad trademark in China. A lawyer representing Shenzhen Proview Technology said the court cited a pending case on the trademark fight in a higher court. Proview was seeking an injunction to stop Apple from selling iPads in Shanghai. Apple shares moved up $3.35 to US$516.39.

There was also some encouraging news from Europe where a closely-watched survey showed that the continent’s biggest economy continues to outperform much of the rest of the debt-hobbled continent.

German business confidence rose for the fourth consecutive month as the IFO institute said its confidence index was up to 109.6 points for February from 108.3 in January. Economists had predicted a more modest rise to 108.8.