TSX advances amid strong RBC earnings
TMX Broadcast Centre is pictured in Toronto on May 16, 2011. THE CANADIAN PRESS/Frank Gunn
TORONTO - The Toronto stock market advanced Wednesday amid well-received earning reports from Royal Bank (TSX:RY) and a couple of big retailers.
The S&P/TSX composite index gained 16.55 points to 14,205.53. The Canadian dollar was off 0.4 of a cent to 89.8 cents US.
U.S. indexes were also higher as sales of new homes in the U.S. rebounded in January to the fastest pace in more than five years
The Dow Jones industrial average was ahead 13.53 points to 16,193.19 as the Commerce Department said sales of new homes increased 9.6 per cent in January to a seasonally adjusted annual rate of 468,000.
It came as a surprise to economists, who had been forecasting a sales drop in January of around four per cent, in part because of a belief that activity would be held back by winter storms in many parts of the country.
The Nasdaq was up 8.1 points to 4,295.69 while the S&P 500 index added 0.61 of a point to 1,845.73.
Royal Bank's (TSX:RY) quarterly net income was up two per cent from a year ago to $2.09 billion or $1.38 a share. Ex-items, RBC earned $1.47 a share, which was above estimates. The bank also announced its quarterly dividend will increase by six per cent to 71 cents per common share. Its shares slipped 26 cents to $72.44 but RBC stock has already charged ahead 5.5 per cent this month.
"They’re very well run and they’re the envy of the world but with that dominant position comes some fairly full valuations," observed Stephen Lingard, managing director at Franklin Templeton Solutions.
Bank of Montreal (TSX:BMO) and National Bank (TSX:NA) also issued earnings reports this week that beat expectations.
The earnings news was mixed in the retailing segment as Sears Canada Inc. (TSX:SCC) had a $373.7 million net profit in its fiscal fourth quarter, up from $39.9 million a year earlier. But the showing was largely due to gains from unusual items, including early lease terminations for some large stores that are closing. Revenue fell about 10 per cent to just under $1.17 billion. Its shares rose 20 cents to $13.50.
Target Corp. (NYSE:TGT) says a massive data breach over the holidays helped push its profit down 46 per cent to $520 million or 81 cents a share, beating estimates by a penny. Revenue fell to $21.5 billion from $22.7 billion, meeting expectations, and its shares ran ahead $4.24 or 7.5 per cent to $60.75 in New York.
On the TSX, tech stocks led advancers with BlackBerry (TSX:BB) ahead 14 cents to $11.87. Its stock has surged about 20 per cent since Feb. 17 on rising investor confidence. It gained almost two per cent this week alone after CEO John Chen unveiled two smartphones at the Mobile World Congress trade fair in Barcelona.
The base metals group was up 0.5 per cent with March copper off a cent at US$3.24 a pound.
The gold sector dropped 1.15 per cent as April bullion fell $14.70 to US$1,328 an ounce.
The energy sector was down 0.2 per cent with the April crude contract in New York up 64 cents to US$102.47 a barrel.