Stocks mainly weak, Nasdaq lifted by Microsoft earns; oil up, C$ down

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(The Canadian Press)

By Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market was little changed in early trading Friday amid higher commodity prices and mixed earnings reports from Canada and the U.S., including well-received data from tech giant Microsoft Corp.

The S&P/TSX composite index moved up 12.6 points to 11,546 following a 91-point jump on Thursday, while the TSX Venture Exchange rose 4.85 points to 1,339.04.

The Canadian dollar was down 0.29 cent to 95.15 cents US, a day after Bank of Canada governor Mark Carney said the sharply higher currency is putting a brake on the country's economy recovery.

And he made it clear that "intervention is always an option" to control the rise of the loonie, which came within about 2.5 cents of regaining parity with the U.S. dollar a week ago.

The TSX energy sector rose 0.5 per cent as the December crude contract on the New York Mercantile Exchange rose 10 cents to US$81.29 a barrel. Crude prices are up more than three per cent this week to a one-year high on optimism an economic recovery is taking root.

Other commodity prices climbed with the base metals group ahead 1.26 per cent as the December copper contract in New York rose six cents to US$3.06 a pound. Teck Resources (TSX: TCK-B.TO) gained 49 cents to $35.60.

The gold sector ran up 1.5 per cent as December bullion gained $8.10 to US$1,066.70 an ounce. Barrick Gold Corp. (TSX: ABX.TO) advanced 69 cents to $40.34.

New York markets were mixed after Microsoft's profit fell 18 per cent in the last quarter to US$3.6 billion, partly because it deferred revenue to let summertime PC buyers get free upgrades to Windows 7, which launched Thursday.

The upgrade program meant that Microsoft counted only about half of its Windows Vista sales in the period. It will report the rest as customers upgrade to the new system.

PC shipments edged up in the July-through-September period after falling all year, but the industry remains far weaker than even a year ago.

Microsoft's revenue sank 14 per cent to US$12.92 billion and its shares climbed $2.46 to US$29.05.

The Dow Jones industrial average slipped 0.5 of a point to 10,080.8 following a 132-point surge on Thursday.

The Nasdaq in particular benefited from Microsoft's report, up 18.84 points to 2,184.13 while the S&P 500 index gained 1.1 points to 1,094.

Other earnings reports included an advance warning from fertilizer company Agrium Inc. (TSX: AGU.TO), which said it expects third-quarter earnings will be 90 to 95 per cent below what they were a year ago when the full report is issued on Nov. 4.

Agrium attributes the decline to lower prices and margins for all three categories of fertilizer that it produces and its shares fell $2.62 to $57.11.

Electronics manufacturer Celestica Inc. (TSX: CLS.TO) generated a small third-quarter loss, reversing a year-earlier profit, as revenues took a hit from the recession and the company booked higher restructuring costs from earlier job cuts.

However, Celestica president and CEO Craig Muhlhauser expressed optimism that revenue growth of 11 per cent between this year's second and third quarters and solid expectations for the current three month period indicates that demand for Celestica's products is stabilizing but its shares fell 21 cents to $9.44.

Shaw Communications Inc. (TSX: SJR-B.TO) shares fell 36 cents to $20.21 as it said net income was $124 million or 29 cent for the three months ended Aug. 31, down 6.3 per cent from $132.3 million or 31 cents a share. Annual net income was $535.2 million, down 20.3 per cent from $671.6 million in fiscal 2008.

In the U.S., Honeywell International Inc. said its third-quarter profit fell 15 per cent from a year ago to US$608 million. Sales dropped in all its divisions as key markets in aviation and industrial products continue to struggle.

Whirlpool Corp, the world's biggest home appliance maker, said its quarterly profit fell 47 per cent to US$87 million. However, cost savings did lead Whirlpool to raise its full-year earnings guidance even though it still sees economic uncertainty ahead.

And energy services company Schlumberger said Friday the worst effects of the economic slump may be over, even though the company's third-quarter profits dropped 48 per cent from a year earlier to US$787 million.

The Houston-based oil company, which helps drillers pull oil and gas from the ground, was hit hard this year as crude prices sagged and drilling companies idled half of their rigs in the U.S.

In overseas trading, Japan's Nikkei 225 stock average gained 0.2 per cent, and Hong Kong's Hang Seng jumped 1.7 per cent while China's Shanghai index climbed 1.9 per cent.

London's FTSE 100 index gained 1.67 per cent while Frankfurt's DAX and the Paris CAC 40 advanced about 1.25 per cent.