Newspaper article The Canadian Press

TSX Down amid CN Revenue Miss, Miners Up on Reassurances on China Growth

Newspaper article The Canadian Press

TSX Down amid CN Revenue Miss, Miners Up on Reassurances on China Growth

Article excerpt

TSX down slightly amid CN revenue miss


TORONTO - The Toronto stock market closed slightly lower Tuesday, weighed down by an earnings report from industrial heavyweight Canadian National Railways (TSX:CNR).

However, mining stocks got a lift after China's leadership indicated it would take measures to support the economy.

The S&P/TSX composite index declined 13 points to 12,745.38, after running ahead for the past four sessions.

Canadian National Railway (TSX:CNR) depressed the TSX even as the railroad handed in quarterly earnings that beat expectations following the close Monday.

CN earned $717 million or $1.69 per diluted share, up from $631 million or $1.44 per diluted share a year ago. Ex-items, CN earned $1.66 per share, up from $1.50 per share a year ago and four cents ahead of estimates.

Revenue totalled $2.67 billion, up from $2.54 billion and slightly below estimates of $2.7 billion and its shares fell $3.37 or 3.2 per cent to $101.68 as CN also cautioned that a slowdown in grain and fertilizer exports during the summer months could make for a challenging second half of the year.

Rival Canadian Pacific (TSX:CP), which posts earnings Wednesday, lost $2.44 to $130.18.

The Canadian dollar was ahead 0.56 of a cent to 97.23 cents US after retail sales for May came in much better than expected. Statistics Canada reported that sales ran up 1.9 per cent, much higher than the 0.4 per cent gain that economists had expected.

The agency said the largest sales increase in dollar terms was a 4.3 per cent gain at motor vehicle and parts dealers.

Meanwhile, Chinese media said Premier Li Keqiang said that growth wouldn't go below seven per cent. He also said that China's economic growth needs to be kept above that minimum, according to Beijing News and reaffirmed 7.5 per cent as this year's growth target.

The report cleared uncertainty about how much China's government would let the economy slow as it tries to shift the basis of growth toward domestic consumption and away from reliance on exports and industrial investment.

"Clearly them putting the floor on growth is comforting because for starters, you never really can be that confident about the data out of China," said Wes Mills, chief investment officer Scotia Asset Management PM Advisor Services.

U.S. indexes were mixed as traders took in a solid earnings report from United Technologies and looked ahead to earnings from Apple Inc. after the close.

The Dow Jones industrials gained 22.19 points to a new all-time closing high of 15,567.74, the Nasdaq composite index declined 21.12 points to 3,579.27 and the S&P 500 index was down 3.14 points to 1,692.39.

United Technologies climbed $3.05, or 2.99 per cent, to US$105.16. The conglomerate said second quarter earnings ran up 17 per cent as strong orders for its Otis elevator business in China and commercial airline parts helped lift sales and profits. …

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