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At the open: TSX up amid avalanche of Canadian earnings

The screens at the TMX Broadcast Centre in Toronto show the closing numbers of the TSX on July 11, 2012.

Matthew Sherwood/The Globe and Mail

The Toronto stock market opened higher Thursday amid a full slate of quarterly earnings from a number of Canadian heavyweights and economic data from both sides of the border.

The S&P/TSX composite index jumped ahead 64.04 points to 12,476.77, while the Canadian dollar climbed 0.28 of a cent to 96.22 cents US.

In the U.S., the Dow Jones industrials climbed 63.21 points to 15,533.88, the S&P 500 jumped 7.65 points to 1,698.56, while the Nasdaq surged 13.16 to 3,667.17.

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The TSX was lifted by strong gains in the metals and mining sector, as shares in Turquoise Hill Resources (TSX:TRQ) climbed nearly 14 per cent to $5.16 after it announced that Rio Tinto PLC was lending it $600-million (U.S.) to help it fund its $6.2-billion Oyu Tolgoi copper mine in Mongolia. Shares in HudBay Minerals (TSX:HBM) also rose 7.64 per cent, or 46 cents, to $6.48, while Capstone Mining (TSX:CS) shares went up 6.25 per cent or 12 cents to $2.04.

On the commodities front, December bullion gained $8.20 to $1,293.50 an ounce. The September crude contract on the New York Mercantile Exchange moved down 89 cents to $103.48 a barrel. Copper saw an uptick of 10 cents to $3.27.

In Canada, Statistics Canada says its new housing price index rose 0.2 per cent in June, following a pattern of similar gains over the past 15 months. The federal agency says June's rise comes after a 0.1 increase in May.

The agency says the new housing price index has risen 1.8 per cent in the past 12 months after an identical annual increase in May.

There was also a flurry of financial reports from across various sectors released Thursday.

Tim Hortons Inc. (TSX:THI) says it's going to borrow up to an additional $900-million to fund the repurchase of its shares. It says it has received regulatory approval to buy back up to 10 per cent of its publicly traded shares, raising a previous spending limit set at $250-million.

The Canadian restaurant company reported a 14.5 per cent increase in its second-quarter net income, which rose to $123.7-million from $108.1-million in the previous year. Total revenue for the company was $800.1-million, up 1.9 per cent from $785.6-million. Its shares rose 65 cents, or 1.09 per cent, to $60.14.

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BCE Inc. (TSX:BCE) reported $571-million of net income attributable to common shareholders, or 74 cents per common share. That was down from $732-million or 94 cents per common share a year earlier.

On an adjusted basis, the media and telecommunications giant earned $594-million or 77 cents per common share – down from $747-million or 97 cents per share in the second quarter of 2012, when BCE's profit was boosted by non-recurring items. Its shares fell 34 cents to $42.21.

Meanwhile, shares in media giant Quebecor Inc. (TSX:QBR.B) dipped 14 cents to $46.71 after it reported a $45.1-million net loss attributable to shareholders and $52.9-million of adjusted income from continuing operations for its second quarter. The adjusted earnings equal 85 cents per basic share, up from 72 cents per share or $46.1-million in the second quarter of 2012.

Quebecor is the majority owner of Quebecor Media, which owns a variety of telecommunication, broadcasting and publishing businesses. The earnings came before a federal regulator was to rule later Thursday on whether Quebecor's Sun TV can be carried on basic cable.

In corporate news, CAE Inc. (TSX:CAE) says it has been chosen to train U.S. Air Force crews to operate Predator and Reaper remotely piloted aircraft, commonly called drones.

The Montreal-based company says the initial one-year services contract is for $20-million (U.S.) and could be worth up to $100-million if extended to the maximum.

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It also announced a $210-million contract to supply eight flight simulator, related equipment and services to an unidentified customer and a third contract worth an undisclosed amount to provide three mission training simulators for the Royal Australian Air Force.

CAE slightly missed analyst profit expectations even though its net profit more than doubled to $45.6-million in the first quarter of its fiscal year on a 15 per cent growth in revenues primarily due to the strength of its civil simulator and flight training business. The company earned 18 cents per share attributable to shareholders for the three months ended June 30. That compared to eight cents per share or $21.5-million a year earlier. Its shares jumped 13 cents to $11.91.

In economic news, the latest figures showed that the number of Americans who applied for unemployment benefits over the past month has fallen to its lowest level in almost six years, signalling fewer layoffs and a strengthening U.S. economy. T The U.S. Labor Department says the four-week average dropped 6,250 to 335,500 – the lowest level since November 2007, the month before the Great Recession began.

For the past few months, concerns have been raised about when the U.S. Federal Reserve will begin pulling back on its monetary stimulus by tapering off its current $85-billion bond-buying program.

Signs that this will happen sooner rather than later have prompted markets to get nervous any time the Fed gives away clues on the timing of this pullback.

Comments from Fed Reserve officials have been in focus this week after two regional presidents said the central bank could make its moves to slow stimulus in the shorter term, though the exact timing was left to interpretation. The bank has previously said that it won't make any moves until there are clear signs that the U.S. economy is faring better The North American markets also got some lift by gains in the world markets overnight.

China's exports and imports both increased in July, beating expectations and easing concerns over the slowdown in the world's second-largest economy. Exports were up 5.1 per cent from a year earlier, while imports jumped 10.9 per cent.

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