July 12, 2010 / 9:50 PM / 9 years ago

CANADA STOCKS-TSX goes flat as U.S. earnings season starts

* TSX slips 0.04 percent to end at 11,565.76

* Six sectors end lower

* Potential earnings surprises sideline investors (Adds details, comments)

By Ka Yan Ng

TORONTO, July 12 (Reuters) - Toronto’s main stock index closed marginally lower on Monday, flattening out as wary investors sat on their hands and braced for any surprises that may come as the U.S. earnings season starts.

The index spent the day in a 104-point range as investors looked ahead to second-quarter earnings results from U.S. companies, with Alcoa Inc (AA.N) reporting after the bell.

A weak run of economic data has raised speculation the global recovery may be losing momentum and the potential for earnings surprises sidelined many investors.

But Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri, said investors should look past a quarter’s worth of earnings and position for the future.

“We think long-term investors should be taking advantage of the attractive valuations in companies that are well positioned longer term, rather than paying so much attention to one quarter (of) reports,” she said.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE slipped 4.69 points, or 0.04 percent, to end at 11,565.76. Six of the index’s 10 sectors were lower.

Alcoa kicked off the U.S. earnings season by posting a second-quarter profit and beating Wall Street estimates as sales soared 22 percent.

The company also raised its estimate for aluminum consumption this year. The shares were up nearly 4 percent in after-hours trading, suggesting a strong start for North American equity markets on Tuesday. [ID:nN12206110]

“It’s all about the guidance, hints about hiring or if they see stronger sales,” said Francis Campeau, a broker at MF Global Canada in Montreal, before Alcoa released its results.

“As for today, the word is lacklustre: a fairly narrow range vis-a-vis what we’ve seen recently.”

Prices of key resources were soft on Monday, with oil settling below $75 a barrel following three straight advancing sessions. That sent shares of Talisman Energy TLM.TO down 0.18 percent to C$16.54, while Canadian Oil Sands Trust COS_u.TO lost 1.6 percent to C$27.16.

But some resource issues proved resilient in the face of the lower commodities, helping to limit the oil and gas sector to a 0.1 percent decline and keeping the overall index little changed. Imperial Oil (IMO.TO) was up 1.24 percent at C$39.30, while EnCana (ECA.TO) was ahead 0.7 percent at C$34.39.

Copper prices fell after China reported a drop in copper imports for the third straight month in June, casting a shadow on the demand outlook and pushing the TSX’s materials group down 0.66 percent. [MET/L]

Teck Resources TCKb.TO fell 3.29 percent to C$34.43, while Inmet Mining IMN.TO lost 2.5 percent to C$46.06.

$1=$1.04 Canadian Reporting by Ka Yan Ng; editing by Rob Wilson

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