MENAFN - ProactiveInvestors - Australia
TSX trims losses after fiscal cliff optimism, commodities still weigh
(MENAFN - ProactiveInvestors - Australia) Toronto's main market narrowed losses by the afternoon Wednesday as House Speaker John Boehner was optimistic about a budget deal to avert the so-called fiscal cliff, but the index was still weighed down slightly by declining commodities as the US dollar strengthened.
Earlier this morning, North American stocks took a steep hit, sparked late in the session yesterday after Senate Majority Leader Harry Reid said little progress had been made in Congress with budget negotiations thus far.
But today, Boehner voiced optimism, as he told reporters he remained hopeful Republicans could agree to a deal with the White House to avoid the 600 billion in tax hikes and spending cuts due to take effect at the start of the year unless a compromise can be reached.
President Barack Obama is meeting with corporate executives at the White House on Wednesday, and is due to meet with Congressional leaders next week.
Back in Toronto, just after 1:00pm ET, the S&P/TSX Composite was down 20.03 points, or 0.17%, to 12,091.60, while the more junior S&P/TSX Venture Composite fell 2.66 points, or 0.22%, to 1,203.51.
Most of Toronto's main sectors were in the red, including materials and energy, but info tech, financials and metals and mining were lately in the green.
Commodities were lower Tuesday, with gold for December down 25.5 to 1,719.30 an ounce after a massive 24 tonne sell order - equivalent to 7,800 contracts - bang on the opening of the world's largest gold exchange prompted a sharp decline in the price of the yellow metal.
Silver futures also dropped almost 42 cents to 33.65 an ounce.
Crude oil for January delivery shed 89 cents to 86.29 a barrel, as the U.S. dollar strengthened, and the base metal copper contract lost 1.6 cents to 3.54 a pound.
Gold giants were mixed, with Kinross Gold (TSE:K) up 0.7% and Goldcorp (TSE:G) and Barrick Gold (TSE:ABX) down 0.3% and 0.4%, respectively. Elsewhere in gold, B2Gold (TSE:BTO) and Eldorado Gold (TSE:ELD) both lost around 1.9%.
Gainers in materials were led by Harry Winston Diamond Corp (TSE:HW), up more than 2.6%, while decliners were led by Silver Standard Resources (TSE:SSO), down 4.6%.
Energy was down, with losses led by Petrominerales (TSE:PMG), lower by 3.9%, and Suncor Energy (TSE:SU), falling 1.7%. Talisman Energy (TSE:TLM) and Canadian Natural Resources (TSE:CNQ) retreated 0.2% and 0.8%, respectively. Gains in the sector were led by Bankers Petroleum (TSE:BNK), up 2.8%.
In corporate news, Finnish mobile giant Nokia has launched a suit against Research In Motion (TSE:RIM) (NASDAQ:RIMM) over patents in the U.S., U.K., and Canada, which could halt sales of BlackBerrys at a key time for the smartphone company.
Nokia said the two parties had a contract since 2003, but RIM sought to extend the use of the licensing agreement in 2011 that relates to WLAN - wireless local access network technology - through arbitration.
A Swedish arbitrator ruled against RIM and found that the company was in breach of the contract, and not entitled to manufacture or sell WLAN products without first agreeing royalties with Nokia.
RIM shares fell in Toronto in the morning, but were later up by more than 4.4%, contributing to gains in tech in Canada. The company's shares are up more than 48% in the last month, rallying on the back of recent analyst upgrades in anticipation of the BlackBerry 10 launch in January.
Also in tech, IT consulting company CGI Group (TSE:GIB.A) reported a fourth-quarter loss as a result of costs tied to its acquisition of Logica, with shares in the business falling over 2% Wednesday.
Elsewhere, China's state-owned CNOOC and its Canadian takeover target Nexen (TSE:NXY) have resubmitted an application for U.S. approval of their 15.1-billion deal, after the deadline for the decision expired yesterday. To complete the takeover, the companies need approval from the Committee on Foreign Investment in the United States. The deal has yet to be approved in any form by the Canadian government. Shares in Nexen were down 0.8% in Toronto.
Meanwhile, Imperial Oil (AMEX:IMO) (TSE:IMO) has stepped in to help parent ExxonMobil (NYSE:XOM) complete its proposed takeover of Calgary-based Celtic Exploration (TSE:CLT), and will participate as a 50 per cent owner alongside ExxonMobil Canada.
Imperial, which is majority owned by US energy giant ExxonMobil, said Wednesday that immediately after the acquisition closes, ExxonMobil Canada will sell a 50 per cent interest in Celtic to Imperial. The investment represents a 1.55 billion commitment by Imperial.
Canadian Tire Corp's (TSE:CTC) FGL Sports has agreed to buy private sports retailer Pro Hockey Life Sporting Goods for 85 million. The transaction follows Canadian Tire's acquisition of FGL Sports in 2011.
On the economic front in Canada, in September, average weekly earnings of non-farm payroll employees were 902.29, down 0.5% from the previous month. On a year-over-year basis, earnings increased 3.4%.
Canada's international travel deficit with the world decreased by 82 million to 4.6 billion during the third quarter, resulting from lower payments by Canadian travellers to the United States and increased receipts from overseas travellers in Canada.
US markets reversed course to turn higher Wednesday after Boehner voiced his view on the budget talks.
The Dow was lately up 53 points to 12,931, the Nasdaq rose 5 points to 2,973, and the S&P 500 gained 3 points to 1,402.
Today, President Obama is meeting with executives from US companies including Caterpillar (NYSE:CAT) and Goldman Sachs (NYSE:GS), with investors hoping the CEOs can push the negotiation process forward.
Meanwhile, a new economic report showed new home sales fell 0.3% in October, after a 0.8% rise in the previous month. Although sales were up 17.2% versus October of last year.
Tuesday afternoon, the Federal Reserve will release the October edition of its Beige Book, a survey of regional economies.
In corporate news, trading firm Getco made a 539 million bid for troubled trading firm Knight Capital (NYSE:KCG). The cash-and-stock buyout bid, which was unveiled in a regulatory filing, values Knight Capital at 3.50 per share, a 41 per cent premium over the company's closing price on November 23.
Getco already owns about 31% of Knight's outstanding shares. Knight suffered a trading glitch in August that sent markets reeling and cost the company more than 460 million.
Big box retailer Costco (NASDAQ:COST) Wednesday announced a special dividend, which will pay shareholders a total of 3 billion. The payment will be made on December 18.
Apple (NASDAQ:AAPL) is said to have fired William Richardson, the tech giant's senior director of iOS services, over the failure of its new Maps app. Richardson was fired before Thanksgiving.
American Eagle Outfitters (NYSE:AEO) Wednesday posted third-quarter earnings that were in line with Wall Street expectations.
Medical tech company Smith & Nephew (NYSE:SNN) has agreed to buy Healthpoint Biotherapeutics for 782 million in cash in a bid to expand its wound management division.
Green Mountain Coffee Roasters (NASDAQ:GMCR) blew past Wall Street's expectations with its fiscal fourth-quarter earnings late Tuesday, with shares rising 24% Wednesday.
Express (NYSE:EXPR) shares also rose after the apparel retailer estimated fiscal-fourth-quarter net income would beat Wall Street estimates.
In other news, the U.S. Environmental Protection Agency is temporarily suspending the award of new contracts to BP PLC (NYSE:BP) (LON:BP), citing a lack of integrity during the Deepwater Horizon oil spill in 2010. Shares edged down.
European markets finished higher today with shares in France leading the region. The CAC 40 rose 0.37% while Germany's DAX gained 0.15% and Britain's FTSE 100 added 0.06%.
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