TSX lower amid earnings, positive data, Twitter debut
Malcolm Morrison, The Canadian Press
Published Thursday, November 7, 2013 6:12AM EST
Last Updated Thursday, November 7, 2013 9:45PM EST
TORONTO -- The Toronto stock market closed lower Thursday as traders waded through a flood of Canadian earnings news and watched Twitter stock skyrocket as the year's most anticipated IPO got underway.
The S&P/TSX composite index declined 86.21 points to 13,294.2, dragged lower by mining and energy stocks.
Twitter stock started trading late-morning Thursday and quickly soared about 90 per cent to $50.09 from the initial public offering price of US$26, which had been set Wednesday night. The stock later closed at $44.90.
But despite Twitter's strong early performance, analysts observed that there will likely be other opportunities to own the stock.
"I think right now, wait and see what happens," said Allan Small, senior adviser at DWM Securities, who observed that Twitter has yet to be profitable.
"I don't think I would be the first guy buying shares today. I would want to see where the dust settles, see where it trades early next week and take it from there."
The Canadian dollar was down 0.4 of a cent to 95.59 cents US as the greenback strengthened in the wake of a surprise decision by the European Central Bank to cuts its key rate to 0.25 per cent from 0.5 per cent. Other data showed that U.S. gross domestic product rose at an annualized rate of 2.8 per cent in the quarter, against the two per cent rise that economists had expected.
U.S. indexes failed to find lift from the GDP data.
The Dow Jones industrials was down 152.9 points to 15,593.98 as investors worried that signs of an improving U.S. economy will persuade the U.S. Federal Reserve to start cutting back on its US$85 billion of monthly bond purchases later this year.
The Nasdaq was down 74.61 points to 3,857.33 and the S&P 500 index fell 23.34 points to 1,747.15.
Traders were cautious ahead of the release Friday of the U.S. government's employment report for October for further hints as to what the Fed might do in wrapping up a stimulus program that has supported a strong rally on markets.
Meanwhile, Canadian earnings news spanned most TSX sectors, including telecom, financial and resource companies.
BCE Inc. (TSX:BCE) adjusted earnings in the third quarter rose by seven per cent to $584 million, or 75 cents per share, which was two cents below estimates. And BCE's revenue rose 2.3 per cent from a year earlier to just under $5.1 billion, slightly below estimates of $5.16 billion. Its shares edged 39 cents higher to $45.89.
Canadian Natural Resources Ltd. (TSX:CNQ) is hiking its quarterly dividend by 60 per cent to 20 cents a share. It also expects to increase annual cash flow by 14 per cent in 2014 to $8.7 billion as production output grows by seven per cent over this year's level.
Cash flow from operations rose to $2.4 billion, or $2.26 per share, in the third quarter, beating estimates of $2.17 a share, and its shares inched up 12 cents to $32.61.
Tim Hortons Inc. (TSX:THI) posted net income of $113.9 million or 75 cents per share in the third quarter, both up from the same time last year but short of analyst estimates. The restaurant operator's revenues also grew, rising by 2.9 per cent to $825.3 million. Analysts had been looking for 78 cents per share of net income, 77 cents per share of adjusted earnings and $824.5 million of revenue and its shares were up 19 cents to $62.79.
Insurer Manulife Financial (TSX:MFC) said that its core earnings for the quarter were $704 million, up sharply from $570 million a year earlier. Net income came in at $1.034 billion, compared with a net loss of $211 million a year ago and its shares climbed 51 cents to $19.22 after hitting a new 52-week high of $19.34.
And Canadian Tire Corp. (TSX:CTC.A) saw its profit climb by 11 per cent to $145.5 million in the third quarter, as strong sales across all retail banners helped it handily beat analyst expectations. The retailer also announced that it will increased its dividend by 25 per cent, to 43.75 cents per quarter, up from 35 cents, starting next year and its stock added two cents to $96.97.
Commodity prices were mixed, with the base metals sector down 2.35 per cent even as December copper rose a penny to US$3.25 a pound. Teck Resources (TSX:TCK.B) gave back 76 cents to C$28.21.
The gold sector declined about 2.2 cent while December bullion fell $9.30 to US$1,308.5 an ounce. Goldcorp (TSX:G) faded 74 cents to C$25.51.
The energy sector was down 1.3 per cent as December crude on the New York Mercantile Exchange declined 60 cents to US$94.20 a barrel. Imperial Oil (TSX:IMO) gave back $1.13 to C$44.31.