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TSX May Struggle To Extend Gains - Canadian Commentary

4/13/2012 8:53 AM ET

Canadian stocks may pause for a breather Friday morning as commodities faltered after China reported slower economic growth in the first quarter of 2012. Also, profit taking after two days of smart gains might weigh on trader sentiment.

U.S. stock futures were pointing to a lower open.

On Thursday, the S&P/TSX Composite Index extended gains for a second session, surging 187.89 points or 1.56 percent to 12,214.65.

The price of crude oil was moving lower Friday morning after Chinese economic growth slowed more than expected. The Chinese economy expanded at the weakest pace in nearly three years in the first quarter of 2012, with growth decelerating more than expected from the fourth quarter of 2011, mounting pressure on the government for continued policy action to support economic activity. The gross domestic product expanded 8.1 percent year-on-year in the first three months of 2012, slower than the fourth quarter's 8.9 percent increase, the National Bureau of Statistics said. The latest result was the weakest in 11 quarters. Economists expected a slowdown in growth to 8.4 percent. Crude for May delivery lost $0.47 to $103.17 a barrel.

The price of gold moved down Friday morning as the U.S. dollar steadied amid inflation data. Gold for June was down $8.00 to $1,672.60 an ounce.

Financial stocks may be in play after US financial major, JPMorgan Chase & Co. reported earnings above consensus. JPMorgan said its first-quarter reported net income decreased to $5.4 billion from $5.6 billion a year ago, while earnings per share improved to $1.31 from last year's $1.28. Analysts were expecting the company to report earnings of $1.18 per share this quarter.

In corporate news from Canada, precious metals miner NovaGold Resources (NG.TO) reported first quarter net income of C$16.8 million, down from last year's C$20.8 million in the same period. On a per share basis, the company reported a loss of C$0.01 in the latest quarter, narrower than the loss of C$0.15 the previous year.

Bio pharmaceutical company Lorus Therapeutics Inc. (LOR.TO) posted a narrower third quarter loss of C$1.0 million or C$0.05per share compared to C$1.5 million or C$0.10 per share last year. Aerospace and defense electronics product maker Firan Technology Group Corp. (FTG.TO) swung to profit, reporting first-quarter net earnings of C$38,000 or breakeven per share compared to a net loss of C$0.2 million or C$0.01 per share in the prior-year first quarter.

Executive search firm Caldwell Partners International (CWL.TO) slipped in to the red in second quarter, reporting net loss of C$241,287 or C$0.014 per share, compared to net income of C$147,676 or C$0.008 per share in the year-ago quarter.

Latin America focused gold miner Orosur Mining Inc. (OMI.V) posted lower third-quarter net income of $4.95 million versus $6.34 million a year ago.

In economic news from the U.S., the Labor Department said the Consumer Price Index, a measure of inflationary pressures in the economy, increased 0.3 percent in March, slightly less than the 0.4 percent increase posted in February. The increase was in line with the expectations of most economists.

From the euro zone, Germany's EU harmonized inflation slowed in March as initially estimated, final data from the Federal Statistical Office revealed. The harmonized index of consumer prices for Germany, which is calculated for European purposes, rose 2.3 percent annually, which was slightly slower than the 2.5 percent growth seen in February.

by RTT Staff Writer

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