TSX rises, Bank of Canada revises forecast; N.Y. down on mixed housing data
10:56 October 20, 2009, EDT.(Canadian Press)
TORONTO - The Toronto stock market was ahead slightly mid-morning Tuesday thanks largely to gains in the mining sector while investors took in the latest warning of how the higher dollar is holding back economic growth.
The S&P/TSX composite index gained 14.2 points to 11,552.6 as the Bank of Canada announced it is leaving interest rates at 0.25 per cent - and will likely keep rates that low until the middle of next year.
But the central bank warned that heightened volatility and the sharp rise in the Canadian dollar "are working to slow growth and subdue inflation pressures."
The loonie started 2009 at 82.1 cents US and on Tuesday was down 1.24 cents to 95.91 cents US as the bank said the country's gross domestic product is still expected to grow by three per cent next year, but only 3.3 per cent in 2011, two-tenths of a point less than the Bank of Canada had forecast in July.
The Canadian dollar has seen particularly sharp runups of late because of a weakening U.S. dollar and higher commodity prices, particularly oil.
The TSX base metals sector was up 0.65 per cent as the December copper contract on the New York Mercantile Exchange was unchanged at US$2.97 a pound after good economic news from China helped push copper up 12 cents on Monday. Teck Resources (TSX:TCK.B) advanced 40 cents to $34.06.
The energy group was down slightly as the November crude contract on the Nymex eased 91 cents to US$78.70 a barrel. Suncor Inc. (TSX:SU) gave back 35 cents $39.81.
The TSX Venture Exchange moved down 1.03 points to 1,337.74.
In other economic data, Statistics Canada's composite leading index - a snapshot of future economic activity - rose by 1.1 per cent in September, its fourth straight gain. And the August reading was revised up from 1.1 per cent to 1.2 per cent. In September, seven of the 10 components advanced, led again by the stock market and the housing index.
And wholesale sales in current dollars fell 1.4 per cent in August to $41 billion.
Statistics Canada blames weaker sales in automotive products, machinery and electronic equipment, and building materials for the decline.
New York markets were weak as investors balanced mixed news from the housing sector.
The Dow Jones industrial average declined 38.5 points to 10,053.7.
The Nasdaq composite index pulled back 6.57 points to 2,169.75 and the S&P futures was down 4.4 points to 1,093.5 despite well-received earnings reports from Apple Inc. and Texas Instruments.
And outside the tech sector, Caterpillar also surprised even as it said its profit plunged in the latest quarter as construction companies bought fewer of its big yellow-and-black machines.
But the company said it sees rebounding demand worldwide and it lifted its profit outlook for the year and its shares ran ahead $1.80 to US$59.65.
Shares in Vancouver-based Finning International (TSX:FTT), which is the world's largest Caterpillar equipment dealer, moved up 39 cents to $17.30.
The U.S. Labour Department said lower energy prices pushed U.S. wholesale prices lower in September.
And while the Commerce Department said while home building edged up in September, applications for building permits fell by the largest amount in five months.
The TSX tech sector rose 0.64 per cent with share in Aastra Technologies Ltd. (TSX:AAH) surging $4.33 to $28.14 after it said Monday it will begin issuing a quarterly dividend due to a jump in its third-quarter profit. The communications equipment maker said shareholders will receive a 15-cent dividend after its profits nearly tripled to $9.6 million.
The gold sector fell 0.85 per cent even as December bullion gained $3.40.70 to US$1,061.50 an ounce.
Kinross Gold Corp. (TSX:K) fell 23 cents to $23.67.
In other corporate news, a Spanish union is planning to strike at an Opel auto plant to protest job cuts planned by Canadian auto parts giant Magna International (TSX:MG.A). Magna has said it wants to lay off 1,350 of the 7,500 workers at Zaragoza and shift part of the factory's production to Germany as part of its takeover of Opel from General Motors Co. Magna shares were ahead 16 cents to $47.21.
Swiss drug company Lonza Group has withdrawn a US$485-million takeover offer for Canadian pharmaceutical products company Patheon Inc. (TSX:PTI), after the deal was blocked by investment firm JLL Partners. The New York company is Patheon's largest investor. Patheon shares fell 15 cents to $2.69.
Overseas, Japan's Nikkei 225 index gained one per cent and Hong Kong's index rose 0.8 per cent.
London's FTSE 100 was off 0.37 per cent, Frankfurt's DAX dipped 0.46 per cent, while the Paris CAC 40 was off 0.33 per cent.
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