TORONTO _ The Toronto stock market was positive Monday as traders focused on corporate earnings to reinforce the view that the American economy is recovering from a dismal first quarter.
The S&P/TSX composite index rose 49.63 points to 15,175.13.
The Canadian dollar was up a slight 0.02 of a cent to 93.18 cents US after tumbling about 3/4 of a U.S. cent Friday in the wake of a disappointing jobs report for June. On Wednesday, the Bank of Canada makes its next interest rate announcement and releases its new Monetary Policy Report.
A strong earnings report from American banking giant Citigroup helped push U.S. indexes higher. The Dow Jones industrials gained 125.35 points to 17,069.16, the Nasdaq advanced 23.22 points to 4,438.71 while the S&P 500 index was ahead 10.51 points to 1,978.08.
Citigroup posted quarterly earnings per share of US$1.24, beating forecasts of $1.06 a share and its stock ran ahead 3.77 per cent to $48.77. The bank also said Monday it will pay US$7 billion to settle an investigation into risky subprime mortgages, the type that helped fuel the financial crisis.
Elsewhere in the financial group, Bank of America (NYSE: BAC, Stock Forum) reports earnings on Wednesday.
On the tech front, chip giant Intel posts results Tuesday while Google reports on Thursday. The week is capped by earnings from General Electric Co. (NYSE: GE, Stock Forum) on Friday.
The flood of Canadian corporate earnings reports generally lags the U.S. by a few weeks. The major domestic report of the week comes from Canadian Pacific Railway Ltd. (TSX: T.CP, Stock Forum)on Thursday.
Walter Spracklin at RBC Capital Markets has reduced his earnings per share forecast for the second quarter to $2.13 from $2.16, reflecting higher costs and lower per-tonne grain revenue. In a research note, he raised his forecast for 2015 to $9.75 a share from $9.48 ``on the expectation for grain volume strength to continue, which lifts our price target to $175 (from $171).'' CP shares rose $1.03 to C$197.41.
Investors will also focus on monetary policy testimony from U.S. Federal Reserve chair Janet Yellen on Tuesday and Wednesday.
``Yellen will likely stress that, while the economy can get by with less accommodative policy now, it is still some ways off from standing on its own two feet,'' said BMO Capital Markets senior economist Sal Guatieri.
``She is neither likely to provide a clear timeline on rate liftoff, nor ratify recent comments from some Fed presidents about a possible earlier rate increase.''
Elsewhere on the corporate front, the generic drugmaker Mylan said it will buy Abbott Laboratories' generic-drug business in developed markets for $5.3 billion.
The energy sector was the leading TSX advancer, up 0.8 per cent even as the price of oil edged down toward $100 a barrel after its biggest one-day drop since April following growing expectations of more supplies from Libya. August crude declined 21 cents to US$100.62 a barrel.
The industrials sector was also supportive as Bombardier Inc. (TSX: T.BBD.B, Stock Forum)signed a number of agreements at the Farnborough International Airshow for its new C Series aircraft.
Bombardier says Chinese company Zhejiang Loong Airlines Co. has signed a letter of intent for 20 CS100 airliners that would be worth US$1.28 billion if all the orders were exercised. Before the show began, Bombardier had announced on Saturday that U.K-based Falko Regional Aircraft Ltd. signed letters of intent for up to 24 C S100 jets. Bombardier shares climbed 11 cents to $3.88.
The gold sector was the biggest TSX drag, down 2.5 per cent as August bullion dropped $30.90 to US$1,306.50 an ounce while investors took profits in the wake of recent gains. Gold prices had advanced for the past six weeks, rising 1.3 per cent just last week.
The base metals group lost 0.2 per cent while September copper was down two cents to US$3.24 a pound.