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Toronto stock market closes higher on solid Chinese growth data, RIM upgrade.
Toronto stock market closes higher on solid Chinese growth data, RIM
BY MALCOLM MORRISON, JANUARY 18, 2013
TORONTO — The Toronto stock market closed higher Friday on further
indications that China continues to recover from a recent economic slump
and an analyst upgrade for BlackBerry maker Research In Motion Ltd.
The S&P/TSX composite index gained 50.96 points to 12,725.69, its best
level in about 11 months, while the TSX Venture Exchange was 2.17 points
higher to 1,235.32.
The Canadian dollar was down 0.62 of a cent to 100.83 cents US even as
Statistics Canada said manufacturing sales increased 1.7% in November to
$49.9 billion, the highest level since May 2012. It was also higher than
the 1.1% gain that economists expected.
Traders looked to the Bank of Canada’s next interest rate announcement on
Wednesday. The loonie also fell alongside other cyclical currencies such
as the Australian dollar and the Norwegian kroner.
U.S. indexes were lacklustre amid solid earnings reports from General
Electric and investment bank Morgan Stanley along with a disappointing
read on consumer sentiment.
The Dow Jones industrials gained 53.68 points to close at a five-year
high of 13,649.7 as the University of Michigan’s consumer survey index
slipped to 71.3 in January from 72.9 in December.
“Although the fiscal cliff was scaled back, consumers appear wary as to
the impact of higher taxes on their disposable incomes,” said CIBC World
Markets economist Andrew Grantham.
“(And) although the decline in sentiment during December had no
discernable impact on spending, given the strong retail sales figures,
lower confidence could begin to impact spending as 2013 continues,”
A disappointing earnings report from chip giant Intel helped push the
Nasdaq down 1.3 points to 3,134.71, while the S&P 500 index also ended
the session at a five-year high, up 5.04 points to 1,485.98.
Research In Motion Ltd. (TSX:RIM) shares were up 7.02% to $15.71 after
Jefferies & Co. upgraded the stock to buy from hold and raised its price
target to US$19.50 from $13. The move came on expectations RIM will open
its corporate BlackBerry email services to iPhone and Android devices.
Even before the upgrade, RIM stock had already surged more than 25% over
the past week on rising optimism ahead of the unveiling of its new BB10
product on Jan. 30.
Traders were relieved at data showing that growth in China rose to 7.9%
in the three months ended in December, up from the previous quarter’s
For the year, the world’s second-largest economy grew by 7.8%, which was
China’s weakest annual performance since the 1990s.
The slowdown was due largely to government controls imposed to cool a
real estate boom and surging inflation fuelled by Beijing’s massive
stimulus in response to the 2008 crisis. But it worsened as demand for
Chinese exports dropped unexpectedly, raising the risk of job losses and
However, analysts say China could suffer a setback if exports weaken or
the government fails to maintain investment spending that is propping up
The Chinese data helped push the TSX up 124 points or 0.98% this past
week while the Dow industrials rose 161.27 points or 1.19%.
All sectors closed higher on the TSX save for a drop in the consumer
Telecoms advanced Friday with Rogers Communications (TSX:RCI.B) ahead 79
cents to $46.23.
The financials sector was also ahead, up 0.59% as CIBC (TSX:CM) climbed
69 cents to $83 while Manulife Financial (TSX:MFC) ran up 18 cents to
Copper prices moved higher in the wake of the Chinese data. China is the
world’s biggest consumer of the metal, which is viewed as an economic
barometer as it is used in so many applications.
The March contract on the New York Mercantile Exchange closed up two
cents at US$3.68 a pound and the base metals component on the TSX
advanced 0.46%. First Quantum Minerals (TSX:FM) gained 21 cents to C
$21.25 and Turquoise Hill Resources (TSX:TRQ) was 27 cents higher at
The gold sector rose about 0.4% with February bullion down $3.80 to US
$1,687 an ounce. Kinross Gold (TSX:K) added eight cents to C$9.45 while
Iamgold (TSX:IMG) improved by 15 cents to $10.88.
Oil prices were little changed after jumping about $2 over the past two
sessions after inventory data showed a sharp decrease in stocks last
week. Prices also found support this week after Islamic militants seized
an Algerian natural gas facility.
The energy sector was ahead 0.45% while the February crude contract on
the Nymex added seven cents to US$95.56 a barrel. Canadian Natural
Resources (TSX:CNQ) climbed 62 cents to C$29.95 and Imperial Oil
(TSX:IMO) ran up 19 cents to $43.61.
On the earnings front, General Electric Co. reported net income of US$4
billion on revenue of $39.3 billion for the quarter. The company’s
operating profit per share was 44 cents, a penny higher than analysts
expected. GE’s revenue also beat analysts’ expectations of $38.8 billion
and its shares jumped 3.47% to $22.04.
Shares in investment bank Morgan Stanley jumped 7.86% to $22.38 as it
said it earned US$867 million or 28 cents a share in the last quarter
after stripping out an accounting charge. That beat expectations by a
penny. Morgan Stanley revenue jumped 37% to $7.5 billion, beating
expectations of $7.2 billion.
After the close Thursday, chip giant Intel Corp. posted quarterly net
income of $2.47 billion, or 48 cents per share, beating expectations by
three cents. Revenue fell 3% to $13.5 billion, matching analyst
expectations. On a call with analysts, Intel chief financial officer
Stacy Smith admitted that tablets are affecting sales of PC chips, which
fell 3% in the quarter. Intel shares lost 6.3% to $21.25.
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