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At midday: Alcoa earnings, U.S. data propel markets higher

An employee at Alcoa Warrick Operations inspects finished rolls of aluminum.


The Toronto stock market was higher Wednesday as U.S. resource giant Alcoa Inc. kicked off the first quarter earnings season with a well-received report and traders looked ahead to the release of minutes from the latest interest rate meeting at the U.S. Federal Reserve.

The S&P/TSX composite index was up 24.89 points to 14,397.34.

The Canadian dollar climbed 0.02 of a cent to 91.58 cents (U.S.).

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New York indexes were positive with markets also finding lift from data showing that U.S. wholesale businesses boosted stockpiles by 0.5 per cent in February, following an increase of 0.8 per cent in January. Sales rose 0.7 per cent in February, rebounding from a sharp 1.8 per cent drop in January, which had been blamed in part on severe weather.

The solid gain in sales should encourage businesses to keep restocking their shelves to meet rising demand.

The Dow Jones industrials came ahead 27.81 points to 16,283.95, the Nasdaq rose 21.65 points to 4,134.64 and the S&P 500 index gained 3.09 points to 1,855.09.

Traders are braced for a slew of first quarter earnings reports over the next few weeks.

"We're looking for pretty modest revenue growth," said Wes Mills, chief investment officer Scotia Private Client Group.

"I think it's going to be very stock specific, valuations don't give you much room to disappoint too far because we're fairly or fully valued. But the general tone of things is, that on the year, global growth is improving. Things still look pretty good," Mills said.

The reporting season got off to an auspicious start Tuesday as Alcoa Inc. said that it lost $178-million (U.S.) in the first quarter as the price it was paid for aluminum dropped eight per cent from a year ago. However, earnings excluding write-downs to reduce smelting and milling capacity were nine cents per share, four cents better than expectations and Alcoa shares rose 3.83 per cent in New York.

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Elsewhere on the earnings front, Montreal-based discount chain Dollarama is hiking its quarterly dividend to 16 cents from 14 cents. The retailer also posted a quarterly net profit of $83-million (Canadian) and diluted earnings per share of $1.17. That compares with $77.1-million in the same quarter last year on diluted EPS of $1.04. Sales for the quarter were $582.2-million compared with $561.8-million year-over-year. Its shares ran ahead $7.42 or 8.65 per cent to $93.20 after earlier hitting an all time high of $93.44.

Meanwhile, investors looked for the mid-afternoon release of the minutes of the Fed's March policy meeting for insight about the possible timing of interest rate hikes. In addition to further reducing its monthly asset purchase program by $10-billion to $55-billion, the central bank changed its forward guidance by dropping the 6.5 per cent unemployment rate tightening threshold.

Instead, it will monitor a variety of labour market and inflation indicators.

Tech stocks led TSX advancers, up 1.6 per cent with Constellation Software ahead $8.54 to $273.75 (Canadian).

Prices were mixed on the commodity markets with May crude on the New York Mercantile Exchange off nine cents to $102.47 (U.S.) a barrel and the energy sector gained 0.2 per cent.

The gold sector was a drag, down one per cent while June bullion fell $2.50 to $1,306.60 an ounce.

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The base metals component was flat while May copper was down three cents to $3.02 a pound.

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