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Stocks up in early trading amid strong U.S. bank earnings, disappointing June retail numbers

Canadian Press, The Canadian Press
1 Comment| July 15, 2014

TORONTO _ The Toronto stock market was little changed Tuesday amid another round of strong earnings from the U.S. financial sector and U.S. retail sales data for June that came in short of expectations.

The S&P/TSX composite index inched up 0.71 of a point to 15,171.94.

The Canadian dollar was off 0.1 of a cent to 93.23 cents US a day before the Bank of Canada delivers its latest interest rate announcement.

New York indexes were in the green as JPMorgan Chase & Co. (NYSE: JPMStock Forum)and The Goldman Sachs Group Inc. (NYSE: GSCStock Forumboth beat analyst expectations in the most recent quarter.

The Dow Jones industrial futures rose 54.43 points to 17,109.85, the Nasdaq climbed 9.67 points to 4,450.09 while the S&P 500 index was ahead 4.97 points to 1,982.07.

On the economic calendar, data showed U.S. retail sales for June rose by 0.2 per cent, less than the 0.6 per cent gain that had been expected. Excluding autos, sales rose 0.4 per cent.

JPMorgan Chase posted second-quarter profit of US$5.99 billion, or $1.46 a share, down from $6.5 billion, or $1.60 a share in the same period a year ago. Revenue slipped two per cent from a year ago to $25.35 billion. The results exceeded forecasts of $1.29 a share and revenue of $23.73 billion and its shares were up 3.4 per cent to $58.16.

And Goldman Sachs reported quarterly earnings per share of $4.10 versus $3.70 a year ago, handily beating expectations of $3.05 a share. Its shares gained 1.5 per cent to $169.50.

Late Monday, the parent of Sirius XM Canada posted a net loss of C$4.9-million or four cents a share in its fiscal third quarter. The loss was partially reduced by contract renewals with Ford and Honda, which factory-install the company's satellite radio receivers. A year earlier, Sirius XM (TSX: T.XSR, Stock Forumhad a profit of one cent per share or $776,119. Its shares gained seven cents to $7.35.

On the merger and acquisition front, cigarette maker Reynolds American Inc. is planning to buy rival Lorillard Inc. for about US$25 billion in a deal to combine two of the oldest and biggest tobacco companies in the U.S.

The markets will also focus on Janet Yellen over the next two days as the U.S. Federal Reserve chair delivers testimony to Congressional committees on the economy and monetary policy. Analysts say her comments will be closely watched for clues as to how she will manage monetary policy in the coming months. They say she is expected to sound optimistic about the economy, but not so positive as to give a hint of any tightening.

The energy component led TSX decliners, down 0.55 per cent as oil prices fell below US$100 a barrel in the wake of the American retail numbers. August crude on the New York Mercantile Exchange dropped $1.21 to US$99.70.

The base metals group was down 0.22 per cent as September copper was unchanged at US$3.25 a pound.

The gold sector was the biggest advancer, up 0.9 per cent while August bullion gained $2.30 to US$1,309 an ounce after falling $30 on Monday.

In other corporate developments, Lions Gate Entertainment Corp. (NYSE: LGF, Stock Forumis getting into the streaming movie business with Chinese e-commerce operator Alibaba Group Holding as part of an agreement that will see movies made available in China. The Netflix-like service, called Lionsgate Entertainment World, will be available exclusively on Alibaba's TV set-top boxes and is expected to launch in August. Lionsgate shares ran up 3.7 per cent to $29.79.


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If the Fed were to increase interest rates, they would be cutting their own throat. They US is the biggest debtor in the world.
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July 15, 2014
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