Source: The Canadian Press
The Toronto stock market was poised to move higher Tuesday after new data showed U.S. retail sales increased a better-than-expected 0.4% in August, the best gain in five months.
Economists had expected a slightly smaller increase of 0.3%. The gain suggested a late spring economic swoon was temporary and not the start of another recession.
Excluding a big decline in autos, retail sales increased 0.6%. That’s double the amount economists had expected.
Data over the past two weeks have regularly beaten relatively modest forecasts, which has reduced fears the economy will fall back into recession.
The Dow Jones industrial average has gained 5.3% so far this month, while the TSX is up about 2%.
Gold stocks were also set to send the TSX higher, as the December bullion contract on the New York Mercantile Exchange jumped $12.50 to US$1,259.60 an ounce. This would follow several days of declines in the gold sector.
In early trading, the October crude contract slipped 14 cents to US$76.05 a barrel after fresh data from Europe pointed to a lethargic global economy.
Eurostat, the EU’s statistics office, said industrial production in the eurozone was flat in July, against expectations for a modest increase, and a survey of German investor sentiment was much weaker than expected.
The Canadian dollar edged up 0.13 of a cent to 97.47 cents US after Statistics Canada reported that the labour productivity of Canadian businesses fell 0.8% in the April-June period after gains in the previous two quarters.
The agency said the productivity decline reflected a slowdown in business output combined with a rise in hours worked.
In New York, stock futures were mixed following the retail sales data. Futures on the S&P 500 slipped 1.7 points to 1,114.5, while Dow Jones industrial average futures fell seven points to 10,465. On the Nasdaq, futures were up half a point to 1,917.25 ahead of the opening bell.
In corporate news, discount retailer Dollarama Inc. (TSX:DOL) said its second-quarter net income fell to $21 million due to the impact of foreign exchange but overall sales were up 13% from the same time last year.
Overseas, Britain’s FTSE 100 fell 0.05%, Germany’s DAX index gained 0.06%, and France’s CAC-40 rose 0.01%. Japan’s Nikkei stock average fell 0.24%, while Hong Kong’s Hang Seng index rose 1.7%.