TSX lower amid heavy slate of corporate earnings news, falling commodities

TORONTO – The Toronto stock market closed lower Wednesday amid a slew of earnings news and negative moves in commodity prices.

The S&P/TSX composite index declined 13.74 points to 12,775.28 while the TSX Venture Exchange was up 5.28 points at 1,204.23.

The Canadian dollar gained 0.09 of a cent to 99.82 cents US.

U.S. indexes were mixed as January retail sales met expectations, with the Dow Jones industrials down 35.79 points to 13,982.91.

The Nasdaq was 10.39 points higher at 3,196.88, supported by Amazon.com Inc., which has struck a deal with CBS Corp. to expand the networks’s content made available to Amazon’s Prime video streaming service.

Amazon stock ran up 4.16 per cent to US$269.47. The S&P 500 index edged up 0.9 of a point to 1,520.33.

U.S. retail sales ticked up 0.1 per cent last month after a 0.5 per cent rise in December. January’s increase was in line with expectations and was the smallest in three months after higher taxes cut into the wages of Americans.

“However, given continued job gains through the start of this year, we are assuming that this slowing in sales will prove temporary and that greater strength will emerge going forward,” said RBC assistant chief economist Paul Ferley.

Analysts think that trading is taking place amid rising caution as a March 1 deadline looms that would see steep automatic spending cuts take effect to the tune of US$85 billion.

“I think there is some reluctance to do much. I think that’s why our market has more or less, the last couple of weeks or so, hasn’t done a darned thing,” said Fred Ketchen, manager of equity trading at Scotia Capital.

“It’s teaching everybody to have a little bit more patience than they would like to have.”

On Wednesday, Jacob Lew, President Barack Obama’s nominee for Treasury secretary, urged Congress to avoid those cuts, warning they would impose “self-inflicted wounds to the recovery and put far too many jobs and businesses at risk.”

Talisman Energy Inc. (TSX:TLM) recorded US$367 million or 37 cents per share in quarterly net income, beating forecasts of 16 cents a share. But the gain was mainly due to disposal of some assets and the company continued to feel the effects of low natural gas prices. Talisman posted revenue of $1.6 billion, which was $300 million less than what was expected. Its shares erased early losses and gained 26 cents to $12.82.

Thomson Reuters (TSX:TRI) posted US$497 million of adjusted earnings, or 60 cents per share in the latest quarter, compared with US$445 million or 54 cents per share in the fourth quarter of 2011. Net income attributable to common shareholders was US$372 million, compared with a year-earlier loss of US$2.6 billion. Thomson’s overall revenue, including discontinued operations, fell to $3.4 million from $3.6 billion, a five per cent decline. The company’s shares fell 70 cents to $30.02 as the company also forecast slow growth and tightening profit margins in 2013, and announced plans to cut 2,500 jobs.

Cheese, dairy and bakery company Saputo Inc. (TSX:SAP) had $130 million or 65 cents per share of net income in the latest quarter, a penny short of analyst estimates. Revenue at $1.8 billion also missed estimates by $100 million and its shares fell $1.12 to $49.70.

In the U.S., farm and construction equipment maker Deere & Co. says its first-quarter net income jumped 22 per cent to US$649.7 million or $1.65 per share. Revenue rose almost 10 per cent to $7.42 billion. Analysts surveyed by FactSet had been expecting earnings of $1.39 per share on revenue of $6.73 billion and its shares lost $3.29 to $90.68.

The information technology sector was the leading decliner, down 3.5 per cent with CGI Group (TSX:GIB.A) down $1.21 to $27.12 while BlackBerry (TSX:BB) dropped $1.25 or 8.2 per cent at $14. The stock has lost about 20 per cent since Jan. 24, days before the company unveiled its new BlackBerry 10 product line. However, the stock had rallied almost 200 per cent from its low of $6.10, chalked up late last September.

The gold sector fell about 1.65 per cent as April bullion on the Nymex declined $4.50 to US$1,645.90 an ounce, its lowest close since last August. Eldorado Gold (TSX:ELD) shed 35 cents to C$10.68.

Consumer and telecom stocks also pressured the TSX.

The utilities sector led advancers, up 0.39 per cent as TransAlta (TSX:TA) climbed 16 cents to $16.35.

The March crude contract on the New York Mercantile Exchange gave up early gains to move down 50 cents to US$97.01 a barrel despite a much less than expected rise in U.S. inventories. The U.S. Energy Department’s Energy Information Administration said supplies rose by 560,000 barrels.

A survey of analysts by Platts, the energy information arm of McGraw-Hill Cos., showed crude stocks were expected to have risen by 2.5 million barrels. However, other data released Tuesday had showed inventories declined last week.

The energy sector was ahead 0.3 per cent while Canadian Natural Resources (TSX:CNQ) gained 25 cents to C$31.80.

March copper backed off from early gains and was unchanged at US$3.74 a pound. Still, the base metals sector was up 0.2 per cent and First Quantum Minerals (TSX:FM) gained 16 cents to C$20.26.