THE CANADIAN PRESS
The Toronto stock market opened higher Thursday morning even as the U.S. Federal Reserve's improved assessment of the economy was tempered by a fresh batch of disappointing economic data.
The S&P/TSX composite index moved up 106.4 points to 10,766.3 following a 30-point rise after the central bank said at the end of its two-day meeting that the economy appears to be "levelling out" rather than shrinking at a slower rate.
It also kept interest rates near zero – and indicated they will stay that way for "an extended period."
But investors were surprised by data showing that retail sales fell unexpectedly in July and more workers are filing for unemployment benefits.
Retail sales fell 0.1 per cent, while economists expected a gain of 0.7 per cent.
The U.S. government says the number of workers filing new claims for unemployment benefits rose to 558,000, compared with expectations for 545,000.
"There is really no positive spin to put on these numbers," said BMO Capital Markets senior economist Jennifer Lee.
"The U.S. consumer remains very weak. The jobs situation, while slowly improving, is still dismal."
Commodity and financial stocks led an advance that spread across all sectors, save for a slight decline in consumer staples.
The TSX energy sector rose 1.1 per cent with the September crude contract on the New York Mercantile Exchange ahead $1.29 to US$71.49 a barrel. Canadian Natural Resources (TSX: CNQ) moved ahead $1.08 to $63.50.
The Canadian dollar rose 0.46 of a cent to 92.34 cents US and the TSX Venture Exchange climbed 7.05 points to 1,193.07.
U.S. futures had indicated a strong opening following the Fed announcement and a strong earnings report from Wal-Mart Stores Inc.
But the Dow Jones industrial average advanced a slight 10.8 points to 9,372.4 in early trading following a 120-point rise Wednesday.
The Nasdaq composite index gained 3.76 points to 2,002.48 while the S&P 500 index added 2.45 points to 1,008.25.
Wal Mart reported second-quarter profit virtually unchanged from a year ago, but results beat Wall Street expectations.
The world's largest retailer said it is boosting its profit outlook as it benefits from a series of cost-cutting moves.
Wal-Mart earned US$3.44 billion, or 88 cents per share, in the quarter. Revenue fell 1.4 per cent to US$100.08 billion and its shares advanced $1.05 to US$51.56.
The Toronto financials sector moved up 0.85 per cent with Royal Bank (TSX: RY) ahead 67 cents to $50.25.
The December bullion contract on the Nymex was up $6.80 to US$959.30 an ounce, taking the gold sector 2.16 per cent higher as Goldcorp Inc. (TSX: G) gained 97 cents to $39.44.
The base metals sector moved ahead almost three per cent as the September copper contract ran up eight cents to US$2.91 a pound after surging almost nine cent on Wednesday. Teck Resources (TSX: TCK.B) improved 70 cents to $29.37.
Canadian-based auto parts giant Magna International (TSX: MG.A) says it has ironed out the final details in its bid to buy General Motors's European Opel unit. The company says "the open questions have been closed" in negotiations between GM and Magna management, and the contract will now to go GM's board. Magna adds it is not clear when GM would make its decision. The company's shares rose $1.16 to $52.78.
Monsanto Co., the world's biggest seed maker, on Thursday reaffirmed its full-year profit outlook at the low end of its previously announced guidance.
The St. Louis-based company said it expects its 2009 earnings to fall in a range of $4.40 per share to $4.50 per share and its shares gained $1.47 to US$83.93.
In Canadian earnings news, T-shirt maker Gildan Activewear Inc. (TSX: GIL) reported third-quarter profits of US$41.5 million or 34 cents per share, down from year-earlier net earnings of US$54.5 million or 45 cents per share. Sales declined 19.2 per cent to US$307.8 million but its shares ran ahead $1.56 to $19.98.
Shares in troubled toy-maker Mega Brands Inc. (TSX: MB) fell 4.5 cents to 48.5 cents as it said Thursday that losses deepened in the second quarter as sales declined. The Montreal-based company reported a net loss of US$13.3 million or 36 cents per share for the quarter ended June 30 after posting a $3.6 million loss a year ago. Sales fell to $70.1 million from $106.4 million.
Petrobank Energy and Resources Ltd. (TSX: PBG) reported net income of $34.7 million or 40 cents per share for the quarter ended June 30, down from year-earlier profits of $57.6 million or 64 cents per share. Oil and natural gas revenue slid nine per cent to $224.4 million compared to $247.5 million recorded during the corresponding quarter of 2008. Its shares moved up 32 cents to $36.22.
In Asia, Japan's Nikkei 225 stock average rose 0.8 per cent while Hong Kong's Hang Seng jumped 2.1 per cent.
London's FTSE 100 index gained 0.88 per cent, Frankfurt's DAX advanced 0.95 per cent and the Paris CAC 40 was up 0.65 per cent as European Union data that showed unexpected growth in Germany and France between April and June, helping the recession in the 16 countries that use the euro to ease substantially.
