Equity Markets
Canada's main stock index turned positive shortly after the open on Thursday as energy stocks reversed opening losses, while financial stocks and Teck Resources led declines.
The Toronto Stock Exchange's S&P/TSX composite index rose 2.08 points, or 0.01 per cent, to 15,784.24. Half of the index's 10 key sectors advanced.
The Canadian dollar edged lower against its U.S. counterpart on Thursday, retreating from a near one-week high earlier in the day, as oil prices fell and the rally in global stocks paused.
Prices of oil, one of Canada's major exports, slipped on profit taking. Oil had been supported in recent weeks by OPEC-led supply cuts, tension in the Middle East and lower U.S. production.
U.S. crude prices were down.
World stocks retreated from all-time highs as traders marked 30 years to the day since the 1987 Black Monday stock market crash.
Canada's commodity linked-currency tends benefit from high risk appetite.
At 9:23 a.m. ET, the Canadian dollar was trading at $1.2481 to the greenback, or 80.12 U.S. cents, down 0.1 per cent.
The currency touched its strongest intraday since Friday at $1.2451. It had found support earlier this week ahead of its October low at $1.2600.
U.S. stocks opened lower on Thursday, a day after scaling record highs, amid a fall in technology stocks led by Apple.
The Dow Jones Industrial Average fell 49.36 points, or 0.21 per cent, to 23,108.24. The S&P 500 lost 7.48 points, or 0.292044 per cent, to 2,553.78. The Nasdaq Composite dropped 36.16 points, or 0.55 per cent, to 6,588.06.
Apple shares slid 2.2 per cent in early trading amid concerns over demand for iPhone 8 and iPhone 8 Plus.
eBbay tumbled 4.4 per cent after the online marketplace warned current-quarter profit could miss estimates.
World stocks set a fresh record high before stalling in Europe on Thursday, as the longest winning streak for Japanese stocks since 1988 and the first close above 23,000 for Wall Street's Dow index helped to offset nerves about Spain.
Thursday's session also marks three decades since the 1987 Black Monday market crash, although overseas movement suggests a different outcome for this trading day with world shares again touching fresh highs and Japan's Nikkei notching its 13th straight day of gains. In the U.S., the pullback came after Wednesdays' record close above 23,000 as tech stocks including Apple and eBay sagged.
"The solid U.S. earnings season is building a strong case for a hawkish Federal Reserve policy and should help easing concerns on soft inflation," LCG senior market analyst Ipek Ozkardeskaya said in a note setting up the trading day. "Sixty out of 498 companies in S&P500 released results so far and earnings positively surprised by 4.68 per cent, nearly one fourth of the Dow Jones and 10 percent of the NASDAQ companies announced earnings as well and surprised investors by 6.37 per cent and 5.62 per cent respectively."
On Bay Street, Rogers Communications Inc. shares may see some movement on the latest results. Rogers said profit more than doubled in the most recent quarter, boosted by gains in its wireless unit. The Toronto-based company's net income rose to $467-million or 91 cents per share, in the third quarter ended Sept. 30, from $220-million, or 43 cents per share in the year-earlier quarter. Revenue rose to $3.58-billion from $3.49-billion.
Outside earnings, Cenovus stock could also get some action after the energy company said before the open that it has agreed to sell its Palliser crude oil operation and natural gas assets in Southern Albert to Torxen Energy and Schlumberger for $1.3-billion. The sale is expected to close in the fourth quarter. The deal marks the latest in a string of moves by Calgary-based Cenovus to cut its debt.
On Wall Street, bigger names reporting include PayPal and Verizon. Ahead of the open, Verizon posted profit of $3.62-billion or 89 cents a share in the third quarter, flat from the year earlier period. Excluding items, earnings per share totalled 98 cents. Revenue rose to $31.72-billion, topping market forecasts. Verizon shares were higher in premarket trading. Analysts see PayPal - which reports after the bell - posting earnings per share of 43 cents.
Also on the agenda, U.S. President Donald Trump is scheduled to meet with Ms. Yellen. Recent reports suggest Mr. Trump could announce the next Fed chair within days. A Reuters poll put Fed Governor Jerome Powell as the likely pick, although the survey also found that Ms. Yellen is still considered the best candidate for the job.
Overseas, world stocks measured by the MSCI index of global markets continued to gain. although the advance appeared to stall as the session wore on with political concerns in Spain casting a shadow over Europe. In Asia, the Nikkei finished up 0.40 per cent. The Shanghai composite index was off 0.35 per cent and the Hang Seng slid 1.92 per cent. News that China's economic growth cooled a bit to 6.8 per cent in the third quarter from 6.9 per cent in the prior quarter weighed a bit.
In Europe, markets were lower after the Spanish government rejected a threat by Catalonia's leader to declare independence unless talks take place. Spain's government called a special cabinet session this weekend to activate measures to take control of the region's semi-autonomous powers, Reuters reported early Thursday. Markets were also sideswiped by disappointing results from consumer goods giant Unilever, French advertising group Publicis and Germany's Kion.
Britain's FTSE was down 0.39 per cent. Germany's DAX fell 0.70 per cent and France's CAC 40 was off 0.59 per cent.
Commodities
Oil prices were lower with both Brent and West Texas Intermediate giving back more than 1 per cent although crude prices still held much of their recent gains. The day's range on WTI so far is $51.17 (U.S.) a barrel to $52.17. Reuters notes that, even with Thursday's early declines, WTI is still about 25 per cent higher than June's levels. Brent crude is about 30 per cent higher compared with prices seen in the middle of 2017.
Profit taking after two weeks of gains was cited for Thursday's declines. On Wednesday, the U.S. Energy Agency reported that U.S. crude inventories fell by 5.7 million barrels last week. However, U.S. output fell by 11 per cent to 8.4 million barrels as hurricane-related shutdowns continued to weigh.
Also tempering prices is continued uncertainty in the Middle East.
"The 'Fragile Five' petrostates - Iran, Iraq, Libya, Nigeria and Venezuela - continue to see supply disruption potential, with northern Iraq crude exports at risk due to an escalation of tensions between the (Kurdistan Regional Government), Baghdad and Turkey, while the United States has decertified the 2015 Iran nuclear deal," Citi said.
In other commodities, gold prices moved off recent lows. Spot gold and U.S. gold futures for December delivery were both higher early on. Silver prices also rose. London copper prices slid on China's somewhat disappointing reading on third-quarter GDP growth.
Currencies and bonds
The Canadian dollar gave back early gains and moved lower as crude prices slipped. The loonie, which caught an updraft Wednesday on a positive reading on August factory sales, was trading in a day range of 80.09 cents (U.S.) to 80.31 cents. At last check, the Canadian dollar had fallen closer to the lower end of that range.
In a note this week, Scotiabank's Shaun Osborne and Eric Theoret said the loonie has now returned to its midpoint of the October range after NAFTA-driven turbulence earlier in the week. At this point, they said, the focus now shifts to next week's Bank of Canada policy announcement and and the outlook for further moves.
"Next week's policy statement is likely to reinforce the BoC's 'data dependent' messaging while maintaining a slightly hawkish bias," they said, noting that rate expectations have held steady since mid-September.
"Our base case view is that Gov. (Stephen) Poloz would like to keep December expectations simmering around the 50/50 point in order to keep his options open," they said."He could balance hawkish concerns (wages, inflation and inflation expectations are picking up, the domestic economy is slowing from (the first half) but it still close to or a little ahead of where the BoC expected it to be in Q3, strengthening global growth) against dovish factors (CAD strength, NAFTA and housing risks) to keep market expectations broadly balanced."
In other currencies, the U.S. dollar index which tracks the greenback against a basket of world currencies turned lower after a flat start. The euro remained at a one-week high against the U.S. dollar despite market concerns over the political situation in Spain.
In bonds, the yields on the 10-year U.S. notes was lower at 2.314 per cent. The yield on the 30-year note was lower at 2.828 per cent.
Stocks set to see action
Apple Inc.'s shares fell in premarket trading on Thursday on growing concerns about muted demand for the iPhone 8 and iPhone 8 Plus. The company has cut orders for both models by about 50 per cent for November and December, Taiwan-based Economic Daily News reported, citing a supply chain official.
Bank of New York Mellon Corp.'s profit beat analysts' estimates, as higher interest rates drove net interest revenue at the world's largest custodian bank in the third quarter. Net interest revenue rose 8.4 per cent to $839-million in the quarter ended Sept. 30, the bank said on Thursday, reporting results for the first full quarter under new Chief Executive Charles Scharf. Net income applicable to common shareholders rose about 1 percent to $983-million. Earnings per share was 94 cents per share, topping analysts' average estimate of 92 cents, according to Thomson Reuters I/B/E/S.
Kinder Morgan Canada Ltd. is warning of fresh delays to its Trans Mountain oil pipeline, citing slower construction and permitting for the $7.4-billion project, The Globe's Jeff Lewis reports. The Canadian unit of the Houston-based company said late on Wednesday that construction preparations are off to a slower start than planned because of the time required to file, process and obtain clearances for the expansion. The company said it is assessing plans that would maintain the current startup target of late 2019, but warned that, "Absent this mitigation, project completion could be delayed by up to nine months."
Barrick Gold has agreed that Tanzania will own a 16 percent stake in three gold mines operated by Barrick's Acacia Mining Plc, the company and a government minister announced on Thursday. Barrick Chairman John Thornton told a news conference in the Tanzanian capital that the company had also agreed to pay Tanzania $300-million as a show of good faith. The company and the government have been in talks for months aimed at resolving a dispute over an export ban which has hit Acacia Mining.
EBay Inc. forecast current-quarter adjusted profit that was largely below analysts' estimates as the company continues to ramp up spending to tweak its e-commerce platforms. Shares were down in premarket trading. EBay forecast fourth-quarter adjusted profit of between 57 cents to 59 cents per share. Analysts on average were expecting a profit of 59 cents per share, according to Thomson Reuters I/B/E/S.
Canadian telecom company Rogers Communications Inc. said its third-quarter profit more than doubled as its wireless business kept firing on all cylinders and it sharply increased its full-year profit forecast. The Toronto-based company's net income rose to $467-million, or 91 cents per share, in the third quarter, from $220-million, or 43 cents per share, a year earlier. Revenue rose to $3.58-billion from $3.49-billion. On an adjusted basis the company earned $1.02 per share, up from 83 cents a year ago.
Travelers Cos Inc. reported a steep decline in quarterly profit but it beat Wall Street estimates even while recording $700-million in catastrophe losses from the destruction caused by Hurricanes Harvey and Irma. Despite a 59 percent drop in core earnings, the property and casualty insurer's profit was helped by a decline in income tax expense and record premiums written. Shares of the company, a Dow component, were up 0.02 per cent at $130.02 in pre-market trade.
Verizon Communications Inc.'s quarterly revenue topped Wall Street analyst estimates on Thursday and the company added more phone subscribers than expected, sending shares of the No. 1 U.S. wireless carrier up 2.3 per cent in pre-market trading. The company said that it added 274,000 phone subscribers who pay a monthly bill on a net basis. Churn, or rate of customer defections for all customers paying a monthly bill, including tablet subscribers, was 0.97 per cent. Wells Fargo analysts had said in a note on Monday that they expected net phone subscriber additions of 185,000 and churn of 1.05 per cent.
Nike Inc. was downgraded to "neutral" from "buy" at Goldman Sachs due to high inventories. Nike shares fell 1.7 per cent in premarket trading.
Kenneth Chenault, one of the longest-serving executives in finance and one of corporate America's few black top leaders, will retire next year as the chairman and chief executive of American Express. He will be succeeded by Stephen Squeri, 58, who has been the company's vice chairman since 2015. Squeri will take Chenault's place on Feb. 1, 2018. Separately, AmEx also reported a 19 percent rise in quarterly profit, helped by loan growth and higher card member spending. The company raised its full-year 2017 earnings per share expectations to $5.80 to $5.90, from $5.60 to $5.80. Amex shares fell 1.3 per cent in premarket trading.
United Continental Holdings Inc. reported late Wednesday third-quarter net income of $637 million or $2.12 per share Earnings, adjusted for non-recurring costs, were $2.22 per share. The results beat Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of $2.18 per share. But shares fell 2.3 per cent in premarket trading.
More reading: Bay Street relives Black Monday: 'It was absolute pandemonium
More reading: Thursday's small-cap stocks to watch
Economic News
Initial claims for U.S. state unemployment benefits dropped 22,000 to a seasonally adjusted 222,000 for the week ended Oct. 14, the lowest level since March 1973, the Labor Department said on Thursday. Data for the prior week was revised to show 1,000 more applications received than previously reported. The decrease in claims was the largest since April and was probably exaggerated by the Columbus Day holiday on Monday, Reuters said.
The Philadelphia Fed said its measure of factory employment in the mid-Atlantic region rose 24 points to a record high reading of 30.6 in October.
With files from Reuters and The Canadian Press