Toronto stock market rises slightly amid mixed earnings, higher commodity prices

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A tote board TSX numbers in Toronto, on Dec.31, 2012. THE CANADIAN PRESS/Frank Gunn

TORONTO - The Toronto stock market closed modestly higher Tuesday amid mixed earnings news and rising commodity prices.

The S&P/TSX composite index advanced for a fourth session, up 30.38 points to 12,824.63 while the TSX Venture Exchange gained 4.46 points to 1,241.07.

Canadian National Railway (TSX:CNR) says its profit increased to $610 million in the fourth quarter with record revenue and carloads.

CN also raised its dividend 15 per cent to 43 cents a share, but its shares dropped 99 cents or 1.04 per cent to $93.77 despite the positive earnings report as analysts noted that CN stock has done very well lately.

"You’re seeing some profit taking against the news as it had a big run-up ahead of time," said Colin Cieszynski, market analyst at CMC Markets Canada.

"We had seen the stock move up about $4 since the beginning of the year and it’s up about $10 since the start of November. So it looks like you had some expectations getting built in."

The Canadian dollar was slightly higher, up 0.06 of a cent to 100.74 cents US amid a better than expected report on November retail sales while traders looked ahead to Wednesday's Bank of Canada announcement on interest rates.

Statistics Canada reported that retail sales rose by 0.2 per cent to $39.4 billion in November. It was the fifth consecutive monthly sales gain reported by Statistics Canada and stronger than the 0.2 per cent dip that economists had projected.

The agency said that higher sales at motor vehicle and parts dealers as well as electronics and appliance stores more than offset declines at most store types.

U.S. indexes were modestly higher as traders took a disappointing housing sector report in stride.

The Dow Jones industrial average climbed 62.43 points to 13,712.13 as sales of previously occupied homes dipped in December to a pace of 4.94 million, down from 4.99 million in November. November’s figure was revised lower, but was still the highest in three years.

"It wasn’t that much of a miss," added Cieszynski.

"When you go through these kind of turnarounds, you’re going to have months where some data hits and some data misses."

The Nasdaq added 8.47 points to 3,143.18 while the S&P 500 index was up 6.53 points to 1,492.51.

In the U.S., industrial giant The DuPont Co. said net income for the quarter ended Dec. 31 dropped to US$111 million, or 12 cents per share. That’s down from US$373 million, or 40 cents per share, a year earlier.

Still, the results beat the consensus estimate of Wall Street analysts of seven cents per share. Sales for the quarter were flat at $7.3 billion and its shares were ahead 83 cents to US$47.82 in New York.

Health-care products company Johnson & Johnson posted quarterly earnings of $2.57 billion, or 91 cents a share, up from $218 million, or eight cents a share a year ago. Excluding about $800 million in one-time acquisition and litigation charges, earnings in the latest quarter would have been $3.38 billion, or $1.19 per share. That beat the expectation of analysts by two cents per share but the company’s 2013 profit forecast came up short of analyst estimates and its shares were down 54 cents to $72.69.

After the close, IBM handed in results that beat for earnings and revenue. Earnings per share for the quarter were $5.39, versus the $5.25 that analysts expected. Revenue came in at $29.3 billion against the 29.09 expected.

The gold sector was the strongest component, ahead about 1.25 per cent with February bullion up $6.20 to US$1,693.20 an ounce. Barrick Gold Corp. (TSX:ABX) rose 41 cents to C$34.55.

The energy sector was ahead 0.42 per cent while February crude on the New York Mercantile Exchange was up 68 cents to US$96.24 a barrel. Suncor Energy (TSX:SU) advanced 36 cents cents to C$34.16.

Nebraska Gov. Dave Heineman has approved a new route for the Keystone XL pipeline that avoids the state’s environmentally sensitive Sandhills region.

Heineman sent a letter to President Barack Obama confirming that he would allow the Canada-to-Texas pipeline, which is to be built by TransCanada (TSX:TRP), to proceed through his state. TransCanada shares declined 33 cents to $48.78.

The base metals sector was ahead 0.4 per cent as the March copper contract in New York climbed three cents at US$3.71 a pound. Teck Resources (TSX:TCK.B) gained 61 cents to C$37.51.

Inmet Mining Corp. (TSX:IMN) said a number of parties have expressed an interest in offering an alternative to the hostile $5.1-billion takeover proposed by First Quantum Minerals (TSX:FM).

Inmet says several parties whom it did not identify are examining confidential information and discussions are ongoing. Inmet says its shareholders should reject First Quantum’s offer of about $72 per Inmet share. Inmet shares gained 35 cents to $71.29 while First Quantum edged 41 cents lower to $20.92.

The information technology sector was slightly higher with Celestica Inc. (TSX:CLS) closing up six cents at $8.56. After the markets closed the company reported a sharp drop in fourth-quarter profits as the contract electronics manufacturer was hit by restructuring and other charges and lower revenue as it wound down work for Research In Motion.

Celestica, which keeps its books in U.S. dollars, said it earned US$7.2 million or four cents per share for the quarter ended Dec. 31 compared with a profit of $69.2 million or 32 cents per share a year ago. Revenue fell to $1.5 billion from $1.75 billion.

But Research In Motion (TSX:RIM) gained 33 cents or 1.9 per cent to $17.74 after jumping 10.8 per cent Monday as the BlackBerry maker heads towards the unveiling of its new smartphones on Jan. 30. Scotia Capital has upgraded the stock to outperform from sector perform.

Elsewhere in the tech sector, Microsoft (Nasdaq:MSFT) has reportedly joined the negotiations to buy struggling computer maker Dell. Both CNBC and The Wall Street Journal say that Microsoft Corp. may invest some of the money needed to take Dell Inc. private after 25 years as a publicly traded company. Microsoft shares slipped 10 cents to US$27.15.