October 28, 2010 / 3:20 PM / in 7 years

CANADA STOCKS-TSX flat as big Potash profit shrugged off

 *TSX down 15.57 points at 12,551.68
 *Seven of 10 sectors weaker  (Updates with details, commentary)
 By Claire Sibonney
 TORONTO, Oct 28 (Reuters) - Toronto’s main stock index was little changed on Thursday morning as impressive earnings from giant fertilizer producer Potash Corp  (POT.TO) failed to move investors and positive U.S. economic data tempered optimistic expectations for more U.S. monetary policy easing.
 Potash Corp fell 3.3 percent to C$146.75 despite posting a 62 percent rise in quarterly earnings, which far surpassed forecasts. [ID:nN28266653]
 “We saw most earnings beat expectations on the sales front as well as the earnings side...one of the bright spots being gold and agriculture,” said Youssef Zohny, associate portfolio manager at Van Arbor Asset Management.  
 “On the negative side, high expectations were built into the price already. So the earnings beats themselves were somewhat expected.”
 Also affecting Potash, a Canadian newspaper reported that Ottawa is growing skeptical of BHP Billiton’s (BHP.AX) $39 billion hostile takeover bid for the world’s largest fertilizer producer. [ID:nN28117784]
 Gold miner Goldcorp Inc (G.TO) jumped 2.3 percent to C$44.33 and competitor Agnico-Eagle Mines (AEM.TO) surged 3.3 percent to C$75.77  after reporting solid quarterly profits late Wednesday. [ID:nN27265533]
 The world’s top gold miner Barrick Gold (ABX.TO) was up 0.5 percent to C$47.17 after reporting a 75 percent increase. [ID:nN28108425]
 Miners were also boosted after Canadian lawmakers on Wednesday defeated a controversial bill that would have raised the bar on their human rights and environmental standards overseas. [ID:nN27254250]
 At 10:36 a.m. (1436 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 15.57 points, or 0.12 percent, at 12,551.68. Seven of its 10 sectors were weaker.
 Supporting the resource-heavy index, commodity prices firmed as the U.S. dollar slipped, with investors eagerly awaiting next week’s key U.S. Federal Reserve meetings.
 Figures on Thursday that showed new U.S. claims for unemployment benefits fell to a three-month low last week were seen as reducing the chances of the Fed taking drastic action to ease monetary policy to try to stimulate the economy.
 “People are tempering their expectations on the amount of (Fed) quantitative easing just based on the economic data,” Zohny said.
 In other earnings news, Cenovus Energy (CVE.TO) shed 0.8 percent to C$28.86 after the company reported that operating income was hit by weaker natural gas prices. [ID:nSGE69R0GP]
 Contract electronics maker Celestica Inc (CLS.TO) (CLS.N) plunged 8.6 percent to C$8.30 after posting a quarterly profit that trailed estimates, hurt by lower demand. [ID:nSGE69R0IO]
 Big-screen movie company Imax Corp IMX.TO surged 20 percent to C$4.33 after reporting an 80 percent rise in quarterly earnings, beating estimates. It forecast its theater network will grow faster in 2010. [ID:nSGE69B0JO]
 Business software maker Open Text OTC.TO dropped 6.6 percent to C$43.64 after posting a 52 percent jump in net income on Wednesday, hurt by lower-than-expected licensing revenue. [ID:nN27142091]
 Research In Motion RIM.TO knocked off 3.2 percent to C$55.56 following a recent rally by the BlackBerry maker after an analust outlook downgrade.
 ($1=$1.02 Canadian)  (Reporting by Claire Sibonney; editing by Peter Galloway)                                        

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