CANADA STOCKS-TSX drops a bit after mixed U.S. earnings reports

Wed Oct 10, 2012 11:16am EDT
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* TSX down 24.03 points, or 0.2 percent, at 12,249.16
    * Seven of index's 10 sectors weaker

    By Claire Sibonney
    TORONTO, Oct 10 (Reuters) - Canada's main stock index was
slightly lower on Wednesday morning as materials shares
strengthened and financials weakened after the starting round of
the U.S. earnings season flashed mixed signals.
    A warning from Alcoa Inc about slower aluminum
consumption underscored concerns about sluggish worldwide
growth. But that was offset somewhat by Yum Brands Inc,
the parent company of KFC, which raised its full-year outlook
after sales in China held up despite that nation's cooling
    "We all pretty much know that China has entered into a
slower growth period...what Alcoa is reporting is old news based
on aluminum demand, which has been down in the dumps for years,"
said Barry Schwartz, vice president and portfolio manager at
Baskin Financial Services. 
    Earnings from warehouse chain Costco Wholesale Corp 
were also a bright spot. The company reported a 27 percent jump
in fourth quarter profit on higher sales and membership fees.
    Among the heaviest laggards on the TSX, Bank of Nova Scotia
 fell 0.9 percent to C$53.30, and Toronto-Dominion Bank
 dropped 0.5 percent to C$81.18.
    Gold miners were among the top gainers after a heavy
sell-off in the previous session. Goldcorp Inc rose 0.9
percent to C$43.79, and Yamana Gold climbed 1.9 percent
to C$18.40.
    Aurico Gold surged nearly 17 percent to C$7.31
after announcing it will sell the Ocampo mine in Mexico, as well
as adjacent exploration projects and a 50 percent stake in the
Orion project, to tycoon Carlos Slim's Minera Frisco for $750
    At 10:50 a.m. (1450 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was down 24.45 points, or 0.2
percent, at 12,249.12. Seven of the TSX's 10 sectors were in
negative territory.
    Analysts are forecasting the third-quarter earnings of Wall
Street's S&P 500 companies will fall 2.3 percent from the
year-earlier quarter, according to Thomson Reuters data, which
would be the first drop in U.S. quarterly earnings in three
    Continued uncertainty over whether, and when, Spain will
apply for a bailout helped darken the market mood. A Spanish
bailout is seen by some as the necessary next step to
alleviating the euro zone's debt crisis.
    In its semi-annual check on the world's financial health
earlier this week, the International Monetary Fund said the euro
zone crisis was an increasing threat to global financial
stability and that confidence was "very fragile".
    In Canadian company news, pharmacy chain Jean Coutu Group
Inc rose 0.4 percent to C$14.59 after reporting a rise
in adjusted quarterly earnings, helped by a double-digit gain in
sales and operating income at its generic drug manufacturing
subsidiary, Pro Doc. 
    "I thought the earnings that came out from Yum Brands ...
Costco this morning and Jean Coutu were pretty meaningful. The
companies continue to report good earnings and modest economic
growth continues," Schwartz said.