Update: TSX Bounces Back to End Modestly Higher with 19 Point Gain as Commodity Prices Advance
Canada's main stock market ended modestly higher Thursday in a see-saw trading session, as investors waded through a slew of earnings reports. The S&P/TSX Composite Index gained 19 points 0r 0.1% to close at 15,191. The TSX opened slightly higher amid broad-based gains, rebounding from Wednesday's 0.2% dip. But the gains soon eroded. Tech and healthcare slumped after negative earnings surprises outweighed the improvement in telecoms and energy. A record drop from AstraZeneca hammered the entire industry around the globe.
The index eventually rebounded back into the green late in the day. Energy led gainers, rising 2% as crude prices rose above $49 a barrel, while materials and financials were both slightly negative, down 0.1%.
In stock news, Potash Corp of Saskatchewan (POT.TO) gained 2% after reporting higher-than-expected revenue as it sold more potash at higher prices compared with a year earlier. Suncor Energy (SU.TO) rose nearly 2% after maintaining its production target for the year while conceding that it will take longer to restore production at its Syncrude oil sands project, which was hit by a fire earlier this year. Teck Resources (TECK-B.TO) gained 1.5% as the miner reported second quarter profits of $577 million, up from $15 million last year. Cameco (CCO.TO) was up 3.5% after settling a dispute with the Internal Revenue Service in the U.S. Cameco will have to pay US$122,000, far below the US$122 million that had been proposed. Maple Leaf Foods (MFI.TO) climbed 4% on rising Q2 profits and stronger sales. The company plans to raise prices in the current quarter to offset rising raw material costs in its prepared meats business. Heavily traded Cenovus Energy (CVE.TO) soared 9% after reporting strong Q2 results that reflected 45 days of results from the assets recently acquired from ConocoPhillips for near US$13 billion.
In economic news, average weekly earnings grew 0.2% in May after the 0.3% month comparable gain in April. Earnings grew at a 2.0% y/y pace in May following the 1.9% pace in April and 1.0% clip in March. That is the fastest growth pace since April 2015's 2.4% gain and puts the measure roughly in the middle of the -0.2% to +4.6% growth range seen since 2009. Earnings had slipped 0.1% y/y as recently as October of last year, so we are seeing some improvement in this measure of compensation cost. Meanwhile, employment improved 19.6k in May after the slim 1.3k gain in April. The CFIB's business barometer measure of small and medium firm sentiment was little change at 60.7 in July from 60.9 in June, following the 66.0 in May that was the best reading since October 2014's 67.6.
The loonie lost nearly three-quarters of a cent to 79.60 US, after closing at a two-year record high on Wednesday.
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