Roger Biduk - Bay Street Higher in Late Morning

Roger Biduk writes:

The Toronto stock market maintained a solid advance late Thursday morning in a broad-based upturn led by the financial sector as investors took in earnings reports from three of the big Canadian banks.
Toronto's S&P/TSX composite index moved up 71.62 points to 8,368.58 with the energy sector the only big decliner.
The TSX Venture Exchange was down 6.16 to 705.92.

The Canadian dollar was off 0.74 cent to 79.04 cents US as Prime Minister Stephen Harper strives to retain power for his Conservative minority against a Liberal-NDP coalition.

The TSX financial sector was up two per cent as TD Bank (TSX: TD.TO), CIBC (TSX: CM.TO) and National Bank (TSX: NA.TO) reported earnings. The banks were hit by credit losses and provisions, but maintained their healthy dividends.

Also reporting was Bombardier Inc. (TSX: BBD-B.TO) with a summer-quarter profit of US$245 million, up from $91 million a year ago. The global plane and train maker's revenue ran up eight per cent to $4.57 billion. Its shares rose 14 cents to $4.03.

Among the banks, TD shares rose 81 cents to $43.31 after its fourth-quarter net income came in at $1.01 billion, off from $1.09 billion a year ago.

Canadian Imperial Bank of Commerce (TSX: CM.TO) earned $436 million, down from $884 million, but its shares gained $2.12 to $47.42.

National Bank advanced 73 cents to $38.55 after fourth-quarter earnings of $70 million, up from a year-ago loss of $175 million.

Royal Bank (TSX: RY.TO), which reports Friday, gained $1.56 to $39.81.

TSX telecom stocks were also a major support as Telus Corp. (TSX: T.TO) gained 68 cents to $37.06 while Rogers Communications (TSX: RCI-B.TO) improved $1.07 to $35.21.

Roger Biduk writes:
The TSX energy sector was down 1.25 per cent as the January crude contract in New York lost $1.13 to US$45.66 a barrel after earlier falling as low as US$45.30, a level last seen in early 2005 as traders see demand shrinking because of worsening economic conditions.

"You could see prices testing $40 by the end of the year because the economic data is really ugly at the moment," commented Christoffer Moltke-Leth, head of sales trading at Saxo Capital Markets in Singapore.

"Demand destruction is still very much the concern."

Suncor Inc. (TSX: SU.TO) gave back 45 cents to $22.82 and Canadian Natural Resources (TSX: CNQ.TO) faltered $1.22 46.15.

Investors also took in news from companies trying to cope with worsening economic conditions.

AT&T Inc. joined the recession's cavalcade of layoffs by announcing it will cut 12,000 people, four per cent of its workforce. Chemical maker DuPont says it will cut 2,500 jobs, and Credit Suisse Group is eliminating 5,300 - 11 per cent of its global total.

Meanwhile, leading mobile phone maker Nokia Corp. downgraded its fourth-quarter outlook for the second time.

In Canada, shares in paper producer AbitibiBowater Inc. (TSX: ABH.TO) were unchanged at 63 cents after it announced it is cutting 1,100 jobs as it closes its troubled newsprint mill in Grand Falls, N.L., and a plant in Tennessee to cope with falling demand in the North American market.

Shares in baked goods company George Weston Ltd. (TSX: WN.TO) rose $1.91 to $58.40 after it said Thursday its is in talks to sell its Dunedin unit's U.S. fresh bread and baked goods business to Grupo Bimbo of Mexico.

European stock markets were narrowly mixed despite big interest-rate reductions. The European Central Bank cut its policy interest rate to 2.5 per cent from 3.25 per cent, and the Bank of England slashed its rate by a full percentage point to two per cent, the lowest since 1951.

The FTSE 100 was 0.85 per cent higher in London, while Germany's DAX gained one per cent and the French CAC-40 was flat.

Tokyo's Nikkei index closed down one per cent, while the Hang Seng in Hong Kong slipped 0.6 per cent.

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