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TSX little changed amid rising commodities concerns about US rally

TORONTO — The Toronto stock market was flat Tuesday afternoon amid concerns about whether a U.S. stock rally may be running out of steam and indications of slower than anticipated economic growth prospects.The S&P/TSX composite index ticked 2.52 points higher to 13,460.58 as the Canadian dollar fell 0.39 of a cent to 95.47 cents US.The Organization for Economic Co-operation and Development cut its 2014 forecast for global growth from 4% to 3.6%. The OECD cited U.S. fiscal uncertainty, the impact of the Federal Reserve tapering its asset purchases and weakness in emerging markets.U.S. markets were lower after indexes backed off Monday after hitting key technical levels, raising questions about whether American markets are due for their first serious retracement in two years.The Dow Jones industrials declined 19.66 points to 15,956.36, the Nasdaq fell 22.41 points to 3,926.65 and the S&P 500 index slipped 5.5 points to 1,786.03.Investors remained cautious a day after the Dow broke 16,000 and the S&P breached the 1,800 mark — both for the first time. The Dow alone has surged more than 20% this year and is up about 900 points since early October amid optimism that the Federal Reserve won’t be moving to cut back on its monthly US$85 billion of bond purchases until well into the new year.“You always have to be cautious when the market has gone up as fast as it has,” said Ian Nakamoto, director of research at 3MACS.“(But) any correction that could happen I would use it to buy the dips because valuations are still reasonable.”The TSX is up about 8.5% for the year so far, dragged down by the mining sector. Most other sectors have put in a solid performance, particularly financials, energy companies and industrials — companies Nakamoto thinks will likely take the TSX higher.“Much more of the direction of the TSX is going to be the financial and energy components because we have had such a correction in the mining sectors,” he observed.Commodity prices advanced and the energy sector was the strongest group, up 0.35% as December crude on the Nymex inched up 27 cents to US$93.30 a barrel. Bankers Petroleum (TSX:BNK) ran up 13 cents to C$3.86.Niko Resources (TSX:NKO) surged 26.39% to $1.82, recovering for a second day after plunging more than 50% Friday after it said that it had secured a “very high cost,” $340-million loan to avoid defaulting on debt payments and other obligations.The gold sector was up 0.25% while December bullion climbed $1.20 to US$1,273.50 an ounce. The sector has been a major drag this year, plunging about 45% as global inflation remains very low while economic conditions are gradually improving, making bullion less attractive as a hedge. Kinross Gold (TSX:K) advanced five cents to C$5.16.Financials were also positive as Manulife Financial (TSX:MFC) gained 20 cents to $20.06.The consumer sector was in focus Tuesday as Sears Canada Inc. (TSX:SCC) stock jumped $1.18 or 7.02% to $17.98 as the retailer said that it will pay its shareholders an extraordinary dividend of $5 per share. Sears also posted a quarterly net loss of $48.8 million or 48 cents per share, mainly due to severance and restructuring costs.Food company George Weston (TSX:WN) posted earnings ex-items of $1.38 a share, seven cents shy of estimates. Its shares declined 34 cents to $81.11 as the company also said overall sales rose 2.1% to $10.38 billion.The base metals sector led decliners, down 0.44% as December copper edged up one cent to US$3.16 a pound. First Quantum Minerals (TSX:FM) fell 30 cents to C$18.55.In other corporate news, Patheon Inc. (TSX:PTI) has received a friendly takeover offer that values the drug company at about US$1.4 billion, which is more than 50% above its recent market price. The offer of US$9.32 per share cash is coming from a group backed by Patheon’s largest shareholder, U.S. private equity firm JLL Partners. Patheon shares surged $3.72 or 62.6% to C$9.66.In the U.S., Home Depot Inc. reported net income of US$1.35 billion, or 95 cents per share, up from $947 million, or 63 cents per share, a year ago. Analysts expected earnings of 89 cents per share. Revenue rose 7% to $19.47 billion from $18.13 billion. Wall Street predicted $19.18 billion. Its shares gained 87 cents to $80.54.Traders are looking to the release Wednesday of the minutes from the latest Fed meeting held late last month for hints about when the central bank might start cutting back on its asset purchases, which have kept bond yields low and encouraged people to buy equities. read more

US auto sales fall in Sept but companies predict rebound despite government

DETROIT – Automakers expect little impact from the federal government shutdown, and they predict a fourth-quarter rebound after a rare sales decline in September.Auto sales dropped 4 per cent from a year ago to just over 1.1 million, mainly due to a calendar quirk that pulled Labor Day weekend transactions into August’s numbers. The drop ended a 27-month streak of gains for the industry.General Motors, Honda and Volkswagen reported double-digit declines for last month. Toyota, Nissan and Hyundai posted smaller decreases. Only Ford and Chrysler reported gains among the bigger automakers.GM’s 11 per cent drop was its first since July of last year. It allowed Ford to get within 2,049 vehicles of unseating GM as the top U.S. automaker for the first time since May of 2011.Most industry officials viewed September as an anomaly. They also downplayed the impact of the government shutdown, assuming it’s a short one.Kurt McNeil, GM’s U.S. sales chief, said the fundamentals are still in place for GM and the industry to rebound in the coming months. Jobless claims are falling, home prices continue to recover, gas prices are down, household wealth is rising and the Federal Reserve has postponed the end of a bond-buying program that kept interest rates low, he said.“As long as the underlying economic factors are supporting the business, which we believe they will through the end of this year and into 2014, we’ll get through this turbulence,” said Ken Czubay, Ford’s U.S. sales manager.Jim Lentz, Toyota’s North American CEO, told The Associated Press in an interview that people have grown used to dysfunction in Washington.Earlier this year, when the government failed to avoid automatic spending cuts known as sequestration, there were predictions that the economy would melt down, Lentz said.“Basically they were told that when you wake up tomorrow, the Earth is going to stop spinning,” Lentz said. “For the most part the Earth didn’t stop. And I think that’s how they view this again.”The shutdown will only affect sales if it causes credit markets to tighten, Lentz said. That will be a problem, he said, because low interest rates and abundant credit have helped fuel the auto sales recovery.There was concern among executives and analysts that a long shutdown — and a looming confrontation over raising the government’s debt ceiling — could eventually cause sales to fall. McNeil said anything over two weeks could cut into consumer confidence.“Consumers don’t like to make big-ticket item purchases when there’s a lot of uncertainty in the economy,” said Jesse Toprak, senior analyst for the TrueCar.com auto pricing site.One reason GM’s sales fell last month was a reversal in pickup trucks, which have been hot-sellers. Sales of GM’s full-sized pickups, the Chevrolet Silverado and GMC Sierra, fell 8 per cent even though the company is selling redesigned trucks.Some versions of the trucks were slow to reach showrooms. At the same time, Ford’s F-Series pickup, the top-selling vehicle in the nation, posted nearly a 10 per cent increase, and sales of Chrysler’s Ram truck rose 8 per cent.Ford and Chrysler offered more than $4,000 in discounts as they sold down 2013 models, according to the Edmunds.com auto site. But GM reduced its incentive spending almost 30 per cent compared with last year to about $3,900.While touting its incentive discipline in September, GM announced increased discounts starting Tuesday, including $1,000 cash on a 2014 Silverado and up to $4,500 on a 2013 model.Pickup trucks are traditionally the top-selling vehicles in the U.S., and they’re key to automakers’ profits. Companies make around $10,000 per truck.McNeil said GM’s sales should return to normal levels for the rest of the year. Through September, the company’s sales are up almost 8 per cent from a year ago.At Honda, sales dropped 10 per cent as two of its most popular models, the Accord midsize car and the CR-V small crossover SUV, posted declines. Sales of the Accord, which have been hot all year, fell nearly 14 per cent, while CR-V sales were off almost 4 per cent.Other automakers reporting sales included:—Ford Motor Co. bucked the industry trend with a 6 per cent sales increase. It was led by sales of the Fusion midsize sedan, which jumped 62 per cent over last September. The subcompact Fiesta posted nearly a 29 per cent gain. But sales of the Escape SUV — one of Ford’s bestsellers — dropped 2 per cent, and Explorer SUV sales were up just 1.5 per cent.—Chrysler Group LLC, with a 1 per cent increase aided by the Ram and the ever-popular Jeep Grand Cherokee with sales up 19 per cent.—Toyota Motor Corp., which posted a 4 per cent sales drop. Sales of the midsize Camry, the top-selling car in the U.S., fell 7 per cent, but the redesigned Corolla compact posted a 1 per cent increase.—Nissan Motor Co. reported a sales drop of nearly 6 per cent. The company’s top-selling Altima midsize car, posted a 13 per cent sales decline.—Volkswagen AG, which has struggled all year against strong 2012 numbers, had a poor month. Its top-seller, the Jetta small car, posted a nearly 10 per cent sales decline.—Hyundai Motor Co., which also has struggled this year, posted an 8 per cent decline. Sales of its Sonata midsize car were down 20 per cent. by Tom Krisher And Dee-Ann Durbin, The Associated Press Posted Oct 1, 2013 8:06 am MDT US auto sales fall in Sept., but companies predict rebound despite government shutdown AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email read more