Friday, July 30, 2010

04:45 pm EST
TSX flat to end week, month
Brakes put on recovery

The Toronto stock market continued to struggle below the breakeven point Friday afternoon as North American markets endured volatile trading on the heels of underwhelming readings for both Canadian and U.S. economies.

The S&P TSX Composite Index ended the week down 15.01 points to 11,713.43, after being down more than 100 points in early in the session. The index lost 0.78 points on the week, but gained 106.43 points, or 0.9%, on the month.

Markets in Toronto are closed Monday for the Civic Holiday.

Enbridge shares edged up 22 cents to $50.02 as the company worked to contain an oil spill in the U.S. Midwest. The regulatory arm of the U.S. Department of Transportation says it warned the company in January that it may have violated safety codes by improperly monitoring corrosion in the pipeline responsible for the massive spill.

Copper delivery for September was ahead two cents to $3.31 U.S. a pound, closing out the month 12% higher.

And Research In Motion shares lifted $1.48, or 2.6%, to $59.16 amid rumours that the company could unveil a new touchscreen phone as early as Tuesday.

In Canadian earnings, George Weston Ltd. said it had a second-quarter profit of $125 million, well ahead of year-earlier net earnings of $4 million on improvements in operating performance at both its grocery store and baked goods divisions. Shares were off 89 cents to $78.41.

Domtar Corp shares were ahead $4.96, or more than 8.9% to $60.48 after the company said second-quarter net income was $31 million U.S. or 71 cents per share, down from $48 million U.S. or $1.12 per share a year earlier when Domtar, like other Canadian paper producers, received a special tax credit.

Brookfield Properties Corp. says it is divesting its residential land and housing business in the United States and Canada as part of the plan to become a pure-play office property company.

Its shares fell 70 cents to $15.34.

Centerra Gold Inc. shares pulled back 16 cents to $12.96 after the company said it has plans to pay dividends on common shares for the first time in its history, announcing a six-cent-per-share dividend.

In economic news, Statistics Canada said Real Gross Domestic Product in the nation increased by 0.1% in May, after being unchanged in April.

Economists were looking for economic activity to rise 0.2%.Goods producing industries rose 0.6%, led by oil and gas extractions and manufacturing activity edged up. Meanwhile, construction and utilities fell back, the agency said.

The Canadian dollar moved up 0.79 cents to 97.29 cents U.S.

ON BAYSTREET

Of the 14 TSX subgroups, nine went lower. Metals and mining vied with consumer staples for the biggest loss, at 0.8% each, while industrials slid 0.7%.

The five gainers were led by information technology stocks, up 1.3%, followed by health-care, 1.1% stronger, and gold, shinier by 0.8%.

The TSX Venture Exchange pulled ahead 5.07 points to 1,427.36 while the Nasdaq Canada index gained 16.20 points at 657.31.

ON WALLSTREET

In New York, stocks enjoyed a mixed performance on Friday.

The Dow Jones industrial average faded 1.22 points to 10,465.94, but gained 41.32 points or 0.4% on the week. The gain on the month was 322.13, or 3.1%.

The S&P 500 index picked up 0.07 points to 1,101.60, but lost 1.06 points on the week. The tech-rich Nasdaq composite index gained 3.01 points Friday to 2,254.70, but fell 14.77 points or 0.7% on the week.

Stocks were supported this month by strong quarterly financial results from major U.S. companies. About 75% of the roughly 300 companies in the S&P 500 that have reported earnings so far have beat analysts' estimates.

But the earnings optimism has been tempered by ongoing concerns about the economy, particularly worries that tepid job growth will eventually undermine corporate profits.

Friday's session was choppy, as investors weighed mixed reports on U.S. economic growth, consumer confidence and regional manufacturing activity.

One expert said the market could push higher late next week if the government's July employment report comes in better than expected on Friday. Economists believe the report will show employers cut 160,000 jobs in July after a loss of 125,000 the month before.

The strong performance this month came after stocks had drifted lower since April as investors grappled with concerns about the debt crisis in Europe and sings the recovery in the U.S. economy will be sluggish.

Chevron posted second-quarter results that topped forecasts and said profit tripled in the quarter. Shares rose about 0.1%.

Merck reported earnings per share that beat analysts' expectations, even as net income fell 52% on acquisition costs. Sales growth, however, fell short of expectations. Shares fell 1.5%.
Walt Disney said early Friday it will sell Miramax Films for about $660 million U.S. to an investors group, Filmyard Holdings.

Economically speaking, gross domestic product, the broadest measure of the nation's economic activity, rose at a 2.4% annual rate in the second quarter, down from an upwardly revised 3.7% in the first quarter.

Economists surveyed by Briefing.com had expected GDP to show a 2.5% annualized rate increase.
It was the fourth straight quarter of growth, and confirmed economists' views that the recession that began in December 2007 ended at some point in the middle of 2009. But the report indicated that consumer spending, which drives the bulk of U.S. economic acclivity, remains weak.

A separate survey showed that consumer sentiment index fell to 67.8 in July from 76 the month before, a reading that still beat forecasts. The Reuters University of Michigan Consumer Sentiment Survey was expected to have risen to 67.5.

The Chicago PMI, a regional reading on manufacturing, rose more than expected in July. The index rose to 62.3 this month from 59.1 in June. Economists were expecting a reading of 56.3.

Treasury prices gained strength, lowering yields on the 10-year note to 2.91% from Wednesday's 3%. Treasury prices and yields move in opposite directions.

The price of a barrel of oil was up 58 cents to $78.94 U.S.

Gold prices regained $14 to $1,184 U.S. an ounce.