TSX moves higher, RIM to unveil new product
TORONTO - The Toronto stock market surged ahead as Research In Motion Ltd. began to unveil its long-awaited BlackBerry 10 products and investors took in U.S. data showing a surprising weakening of the American economy in the fourth quarter.
The S&P/TSX composite index was 60.11 points higher to 12,890.67, led by the mining sector, while the TSX Venture Exchange was ahead 4.02 points to 1,235.94.
RIM (TSX:RIM) stock contributed to the positive showing, up almost four per cent as chief executive Thorsten Heins unveiled the BB10 and announced the company's corporate name would be changed to BlackBerry at a widely covered event in New York City.
The stock had declined over the past two sessions — 3.4 per cent Tuesday and a 7.6 per cent drop on Monday. But that was viewed merely as profit taking as the stock has staged a huge comeback since hitting a fresh 52-week low of $6.10 last September. The shares were up about four per cent or 63 cents at C$16.29..
The U.S. Commerce Department reported Wednesday that the economy shrank by 0.1 per cent amid a plunge in defence spending, a 5.7 per cent drop in exports that analysts think was linked to Hurricane Sandy. The recession in parts of the eurozone also hurt performance. Economists had expected growth of 1.1 per cent in the October-December period.
The Canadian dollar slipped 0.24 of a cent to 99.52 cents US.
U.S. indexes were lacklustre following the release of the GDP report with the Dow Jones industrials down 16.73 points at 13,937.69, the Nasdaq gained 0.07 of a point to 3,153.73 while the S&P 500 index was down 2.07 points to 1,505.77.
Traders also looked to the wrapup of the Federal Reserve's meeting on interest rates.
No movement on interest rates is expected from the Fed. But traders will be looking for any hints as to when the Fed might start to wind up its current round of economic stimulus, which has involved buying bonds by increasing the money supply.
There has been a growing expectation that it may be tempted to reverse its position after minutes from the last meeting in December showed a split among members over how long to continue the stimulus. Some thought the program should be slowed or stopped before the end of 2013 amid concerns that the bond purchases would destabilize the economy.
Investors also digested earnings reports from corporate heavyweights including aircraft maker Boeing and online retailer Amazon.
Airplane maker Boeing Co. says its fourth-quarter profit fell 30 per cent to $978 million, or $1.28 a share, nine cents better than analysts expected. Adjusted profit dipped to $1.46 a share from $1.92 a share. Revenue rose 14 per cent to $22.3 billion, which was slightly below expectations. Boeing says its adjusted 2013 profit estimate of $6.10 to $6.30 a share assumes "no significant financial impact" from a move on Jan. 16 by the Federal Aviation Administration to ground the 787 Dreamliner pending a probe of its battery. Its shares rose 0.77 per cent to US$74.22.
Amazon stock ran ahead almost four per cent even as the online retailer said after the market close Tuesday that fourth-quarter net income fell 45 per cent to US$97 million, or 21 cents per share, seven cents below estimates. Revenue of $21.27 billion missed expectations of $22.26 billion. But Amazon’s profit margin was much better than expected at 24.1 per cent compared with 20.7 per cent a year earlier.
Montreal-based IT services company CGI Group Inc. (TSX:GIB.A) says its first-quarter revenue more than doubled to $2.53 billion, up 147.5 per cent from a year earlier. CGI’s net income was $22.4 million or seven cents per share, after including $153.4 million of costs related to its takeover of a U.K. firm. On an adjusted basis, CGI reported 44 cents per share of earnings for the quarter and its shares gained $1.28 to $25.57.
Traders also looked to positive employment data two days before the U.S. government comes out with its non-farm payrolls report for January.
Payroll firm ADP reported that the private sector created 192,000 jobs during January. Economists expect the government report to show that the economy created a total of 153,000 jobs, about the same amount as December.
Gold prices moved higher as the U.S. growth data suggested the Fed could keep stimulus measures around for some time yet. The gold sector ran ahead about 1.5 per cent as February bullion advanced $15.40 to US$1,676.20 an ounce. Goldcorp Inc. (TSX:G) climbed 65 cents to C$36.76.
The base metals component was ahead 0.37 per cent as March copper on the Nymex gained four cents to US$3.74 a pound. HudBay Minerals (TSX:HBM) rose 25 cents to $11.77.
Oil prices lost some early momentum after the economic data was released as the March crude contract on the New York Mercantile Exchange edged up 14 cents to US$97.71 a barrel. But the energy sector was ahead 0.3 per cent and Canadian Natural Resources (TSX:CNQ) rose 25 cents to C$31.55.
The industrials sector was the leading decliner with Canadian Pacific Railway (TSX:CP) down $1.71 to $114.51 after surging Tuesday in the wake of a well-received earnings report.
European bourses were lower as London's FTSE 100 index moved down 0.11 per cent, Frankfurt's DAX declined 0.43 per cent while the Paris CAC 40 slipped 0.54 per cent.