P.M. market numbers for January 20, 2010

By Staff | January 20, 2010 | Last updated on January 20, 2010
5 min read
| North American markets | International markets | Bonds | Currency | Commodities |

The Toronto stock market closed lower Wednesday as word of tighter lending standards in China raised a fresh round of concern about the global economic revival.

The S&P/TSX composite index closed well off the lows of the session, coming back from a 182-point deficit to finish down 84.1 points at 11,679.32.

U.S. earnings news from Morgan Stanley and IBM weighed on markets.

Investors also took in data showing Canada’s annual inflation rate at relatively tame 1.3% in December. Excluding the volatile energy component in the consumer price index, the annual inflation rate would have been a mere 0.4% in December.

The better-than-expected inflation reading, along with strength in the U.S. dollar and weak oil and metal prices, depressed the Canadian dollar. The currency fell 1.51 cents to 95.51 cents US after going as low as 95.34 US cents earlier in the day.

"There’s not many factors out there… right now, today, that are positive for the Canadian dollar," said George Davis, chief technical analyst at RBC Capital markets.

"And given the run-up in the currency up to last Thursday, people (started to) take some of their profits off the board."

Commodity prices backed off after the chairman of the Chinese Banking Regulatory Commission said that China will slow its massive lending spree and step up monitoring of banks. China is trying to prevent speculative bubbles in real estate and other assets while keeping the country’s economic recovery on track.

Liu Mingkang said the total amount of loans will grow by as much as 18% in 2010 year over year, compared to nearly 32% in 2009.

The regulators comments raised fears that China’s strong economic recovery could fade, undermining a fragile global economy.

"And of course, Chinese growth has been really the big story that’s driven the commodity markets over the last year," said Colin Cieszynski, market analyst at CMC Markets Canada.

"… It’s been the idea of a quick Chinese recovery rather than a U.S. recovery. So if the brakes start to get put on the Chinese economy, it could of course impact commodity prices around the world."

Beijing started to take steps to rein in stimulus-fuelled liquidity a week ago, raising reserve requirements for banks and increasing the rate paid on treasury bills.

A stronger greenback also contributed to a decline in commodity prices.

The gold sector was the biggest percentage decliner on the TSX, down 2.92% with the February bullion contract on the New York Mercantile Exchange closing down $27.40 to US$1,112.60. Barrick Gold declined $1.21 to C$39.70 while Goldcorp Inc. faded $1.58 to C$40.02.

The base metals sector was down 2.35% as the March copper contract on the Nymex declined nine cents to US$3.35 a pound. First Quantum Minerals lost $3.70 to C$95.70 and Labrador Iron Mines Holdings fell 39 cents to C$6.65.

The Toronto energy sector moved down 0.69% as the February crude contract on the Nymex lost $1.40 to US$77.62 a barrel. Imperial Oil lost 48 cents to C$40.15.

The TSX Venture Exchange moved 22.17 points lower to 1,590.69.

New York indexes also fell back with New York’s Dow Jones industrial average falling 122.28 points to 10,603.15, the Nasdaq composite index declined 29.15 points to 2,291.25 while the S&P 500 index lost 12.19 points to 1,138.04.

Bank of America Corp. said Wednesday it lost US$5.2 billion during the final three months of 2009. The bank lost 60 cents per share, more than the 52 cents analysts had been expecting, according to Thomson Reuters. But the largest bank in the U.S. said its credit problems are beginning to stabilize while provision for credit losses dropped 14% during the quarter and its shares edged 17 cents higher to US$16.49.

Morgan Stanley says it earned $617 million or 29 cents a share in the last three months of 2009. But the company missed on expectations of 36 cents a share and delivered $1 billion less revenue than analysts had forecast and its shares declined 53 cents to US$30.63.

The TSX financial sector weakened slightly following the U.S. reports and was down 0.35%.

Shares in Sun Life Financial dipped 17 cents to C$32.68 as it announced it will pay at least US$20 million for the naming rights to the stadium of the NFL’s Miami Dolphins, home of this year’s Super Bowl. A source close to the deal says Canada’s third-largest insurance company has secured the rights for at least five years, paying US$4 million each year.

In other earnings news, IBM Corp. said Tuesday after the market close that it managed a 9% increase in profit to US$4.8 billion, or $3.59 per share in the last quarter. Both earnings and revenue beat expectations but its shares fell $3.89 to US$130.25.

"Although IBM did, for the most part, post solid results (save for its consulting services sales), the fact that the stock is down is testament to the view that all the good news is priced in," observed David Rosenberg, chief economist and strategist at Gluskin Sheff.

In other Canadian economic news, declines in sales by Canada’s aerospace and auto industries held back manufacturing sales gains in November, which logged a slim 0.1% rise to $42.6 billion for the month

Elsewhere on the corporate front, Calgary-based Superior Plus Corp. said it has agreed to buy Griffith Holdings, a retail and wholesale fuel distributor in upstate New York for US$125 million. The diversified company added it will still slash its outlook for the year to between C$1.95 and $2.15 a share in operating cash flow from its earlier prediction of $2.05 to $2.25 as the economic downturn continues to weigh on its results. Its shares lost 68 cents to C$14.15.

A South African provincial government surprised First Uranium Corp. by withdrawing authorization for a new tailings storage facility. Its shares tumbled 56 cents or 21% to C$2.10.

(The Canadian Press)

North American markets Back to Top
Close Change YTD
Dow Jones 10,603.15 -122.28 or -1.14% +1.68%
S&P 500 1,138.04 -12.19 or -1.06% +2.06%
NASDAQ 2,291.25 -29.15 or -1.26% +0.97%
TSX Composite 11,679.32 -84.10 or -0.71% -0.57%

International markets Back to Top
Close Change YTD
Nikkei 10,737.52 -27.38 or -0.25% +1.81%
Hang Seng 21,286.17 -391.81 or -1.81% -2.68%
SENSEX 17,474.49 -11.57 or -0.07% +0.06%
FTSE 100 5,420.80 -92.34 or -1.67% +0.15%
CAC 40 3,928.95 -80.72 or -2.01% -0.19%
DAX 5,851.53 -124.95 or -2.09% -1.78%

Bonds Back to Top
Bonds $Current $Previous %Yield
Cdn. 10-year bond 102.63 102.18 3.42
Cdn. 30-year bond 116.32 115.75 4.01
U.S. 10-year bond 97.72 97.28 3.65
U.S. 30-year bond 98.34 96.38 4.54

Currency Back to Top
BoC Close Today Previous
Canadian $ 0.9551 0.9702
US $ 1.0470 1.0307

Euro Spot Rate Today Previous
Canadian $ 0.6774 0.6784
Euro 1.4763 1.4741

Commodities Back to Top
Gold AM PM
London Gold Fix ($US) $1,129.00 $1,120.25

Oil Open Change
WTI Crude Future (US) $77.62 -$1.40 or -1.77%


Advisor.ca staff


The staff of Advisor.ca have been covering news for financial advisors since 1998.