January 16, 2013 at 12:00 PM EST
TSX dives
Wednesday, January 16, 2013 00:27 PM EST TSX dives Debt ceiling haunts markets The Toronto stock market was lower Wednesday while traders take in strong U.S. bank earnings and a cut in the World Bank’s global growth forecast for this year. The S&P/TSX Composite Index fell 44.54 points to greet noon at 12,597.43 The Canadian dollar sagged 0.12 cents to 101.49 cents U.S., as the greenback strengthened on worries about the impasse over raising the U.S. debt ceiling while traders awaited the release of the latest U.S. regional economic report. In other corporate news, Canadian autoparts giant Magna International Inc. says it expects between $31.3 billion and $32.7 billion U.S. of sales globally this year. Magna says it expects about half of its total 2013 revenue will come the sale of parts to North American manufacturing operations. Magna estimates automotive manufacturers will produce 15.3 million vehicles in North America this year and 12 million in Europe. Its stock added three cents to $51.21. The TSX tech sector was positive after Research In Motion said the Visa credit card system has approved the smartphone company’s method for handling secure mobile payments. The green light from Visa is a step towards offering global support for any device equipped with the BlackBerry maker's mobile-payments technology and its shares were 77 cents higher to $15.04. The base metals component slid as the World Bank report raised demand concerns, pushing March copper on the New York Mercantile Exchange down three cents to $3.61 U.S. a pound. Teck Resources shed 52 cents to $36.45. Among energy issues, Suncor Energy gave back 23 cents to $33.69. The financials sector was off with Manulife Financial down 12 cents to $14. The gold sector was off while Kinross Gold Corp. faded six cents to $9.50. The World Bank said what it calls a frustratingly slow economic recovery in developed nations is holding back the global economy, as it sharply cut its outlook for world growth in 2013. The German government cut its 2013 economic growth forecast to 0.4% from a previous estimate of 1%, according to that country’s economy ministry. ON BAYSTREET The TSX Venture Exchange shaved off 3.41 points to 1,228.38 Information technology cleared breakeven by 0.6%, but the rest of the 14 Toronto subgroups were lower, weighed mostly by metals and mining, off 1.2%, while health-care and global base metals slipped 0.9% each. ON WALLSTREET U.S. stocks were mixed Wednesday as investors weighed the latest corporate results against worries about the debt ceiling and global economic growth. The Dow Jones Industrial Average fell 24.68 points to 13,510.20 The S&P 500 slid 0.46 points to 1,471.88. The Nasdaq Composite moved up 6.24 points to 3,112.30 Boeing shares fell more than 3% as the aircraft maker's Dreamliner continued to face problems. Two Japanese airlines grounded their fleets of 787 aircraft after one of All Nippon Airways' Dreamliners was forced into an emergency landing. Before the market opened, JPMorgan said it earned $5.7 billion U.S., or $1.39 a share, in the fourth quarter. The bank said chief executive Jamie Dimon's bonus would be cut by more than half after the London Whale debacle over bad trades. JPMorgan's earnings were in line with expectations, although revenue was hurt by declining fees and subdued trading activity, according to analysts at Baird Equity Research. Goldman Sachs reported earnings that beat expectations, drive by strong results from its proprietary trading business. Shares of Chipotle plummeted in early trading, after the Mexican food chain restaurant revised fourth-quarter earnings well below analysts' expectations. U.S. Bancorp earnings fell short of expectations due to charges related to a previously disclosed foreclosure settlement. eBay reports after the close. Overall, S&P 500 companies are expected to report earnings growth of 3.2% for the last three months of 2012, according to S&P's Capital IQ. As for economic reports, the government's key measure of inflation showed that U.S. consumer prices slowed to a 1.7% annual increase last month -- mostly due to a decline in gas prices. In other economic news, industrial production rose 0.3% in December, according to the Federal Reserve. Economists had anticipated a 0.2% after industrial production jumped 1% in November. At 2 p.m. ET, the Federal Reserve will release its Beige Book, a survey of regional economies. Prices on the 10-year U.S. Treasury note gained some ground, lowering yields to 1.82% from Tuesday’s 1.83%. Treasury prices and yields move in opposite directions. Oil prices added 90 cents to $94.18 U.S. a barrel. Gold prices slid $4.20 an ounce to $1,679.70 U.S.
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