Toronto stock market up amid heavy slate of earnings news, rising gold stocks

TORONTO – Rising gold stocks helped push the Toronto stock market higher Friday on top of three straight days of advances that have left the TSX at its highest level since April 2011.

The S&P/TSX composite index was ahead 56.63 points to 13,888.21.

The Canadian dollar slid 0.42 of a cent to 91.11 cents US.

U.S. indexes were mixed amid U.S. earnings reports from a variety of sectors and economic data showing rising industrial production and declining housing starts.

The Dow Jones industrials rose 41.55 points to 16,458.56, the Nasdaq fell 21.11 points to 4,197.58 and the S&P 500 index was off 7.19 points at 1,838.7.

General Electric’s net income rose five per cent to US$4.2 billion in the fourth quarter on rising profits from the sale of aircraft engines, oil and gas drilling equipment, and appliances. Ex-items, GE met analyst expectations of 53 cents a share but its stock fell 62 cents to $26.58.

Investment bank Morgan Stanley earned US$433 million, or 20 cents a share, in the fourth quarter. That compared with $982 million, or 49 cents a share, a year earlier. Ex-items, it earned 50 cents a share, six cents ahead of estimates and its shares gained $1.40 to $33.40.

After the close Thursday, Intel said its fourth-quarter net income rose six per cent to US$2.63 billion or 51 cents a share, as the company offset flat demand for its personal computer chips with higher sales of other products. Revenue rose three per cent to $13.83 billion. Analysts expected a profit of 52 cents per share on revenue of $13.72 billion and its shares dropped 69 cents to $25.85.

Analysts note that the start to the fourth-quarter earnings season this past week has been positive but with the Dow and S&P 500 trading at all-time highs, there are fairly high expectations.

“Companies are more or less getting to expectations but they’re not beating, we’re not getting the upside surprises that can ignite the next round of gains,” said Colin Cieszynski, Canadian markets specialist at CMC Markets Canada.

“Intel is a good example of this — pretty lacklustre. They missed by a penny, they marginally beat on sales, sales guidance is flat and then the stock is down (almost) three per cent.”

Elsewhere, Dollarama Inc. (TSX:DOL) said bad weather had a severe impact on December sales but that they have been trending back to normal levels. The Montreal-based retailer says comparable-store sales in the normally busy month were down 7.5 per cent.

Dollarama edged 34 cents lower to C$82.74.

RBC also downgraded Bombardier (TSX:BBD.B) to sector perform from outperform after the transport giant said that its flagship new CSeries airliner will be going into service later than expected. Its stock fell 7.74 per cent Thursday on the news and lost six cents to $4.11 Friday.

The TSX gold sector, the worst performing component on the Toronto market last year, ran up almost four per cent.

The sector fell almost 50 per cent last year and “I think a lot of people dumped it at the end of last year to get it off the books and now you’re seeing the relief rally,” said Cieszynski.

February bullion rose $11.70 to US$1,251.90 an ounce. Barrick Gold (TSX:ABX) advanced 69 cents to C$20.61 while Goldcorp (TSX:G) gained $1.05 to $25.43.

The tech sector climbed 1.37 per cent as BlackBerry (TSX:BB) rose 61 cents to $9.98.

Financials were also positive, up 0.3 per cent with Royal Bank (TSX:RY) ahead 50 cents to $71.86.

The energy component was up 0.13 per cent as the February crude contract on the New York Mercantile Exchange rose 41 cents to US$94.77 a barrel.

March copper was unchanged at US$3.35 a pound, and the base metals sector lost early momentum to move down 0.43 per cent. Lundin Mining (TSX:LUN) was off six cents to $5.04.

On the economic front, the U.S. Commerce Department said Friday that builders broke ground last month at a seasonally annual rate of 999,000 homes. That’s 9.8 per cent lower than November’s pace of 1.12 million, which was the most in five years.

For the year, builders started 923,000 homes and apartments, up 18.3 per cent from 2012.

Applications for building permits, considered a good sign of future activity, fell three per cent in December to a rate of 986,000.

Other data showed that U.S. factory production rose 0.4 per cent in December, following gains of 0.6 per cent in both November and October.

The TSX ran ahead 141 points or one per cent this past week, with advances paced by the precious and base metal mining sectors. But the Dow industrials ended the week flat amid the mixed earnings news, up just 22 points or 0.13 per cent.