Toronto forges ahead after early losses

Cenovus, BCE in focus

12:13 pm EST

The Toronto stock market shook off early declines to register a modest advance Wednesday amid falling prices for oil and metals and concerns about potential fallout from the worsening debt crisis in Europe.

The S&P/TSX Composite Index approached noon Wednesday up 31.62 points to 11,528.92

The Canadian dollar slid 0.09 of a cent to 97.37 cents U.S.

Buyers have been moving cautiously to buy up stocks that were beaten down during a series of sharp declines last month that left the TSX more than 10% below its 2012 highs at the end of February.

Energy stocks declined as Canadian Natural Resources fell 44 cents to $27.22 and Cenovus Energy gave back 31 cents to $32.16.

The telecom sector was also a major source of weakness with BCE Inc. down 53 cents to $41.532.

The gold sector strengthened, with Goldcorp Inc. gaining 33 cents to $40.79.

The base metals group shed early losses and moved up while July copper edged a penny lower to $3.33 U.S. a pound.

Financials also strengthened with TD Bank ahead 63 cents to $78.73.

On the earnings front, discount retailer Dollarama Inc. said its first-quarter profit rose 40% to $42.6 million or 56 cents a share, which beat estimates by six cents.

The Montreal-based company''s revenue for the 13 weeks ended April 29 was just under $398 million, up 15% from the comparable period last year and its shares ran ahead $3.56 to $60.43.

Elsewhere, oil and gas producer Enerplus Corp. cut its dividend in half on Tuesday to a monthly payment to shareholders of nine cents per share from 18 cents amid weaker oil and natural gas prices. Its shares gave back 35 cents to $13.17.

Shares in paper maker Domtar Corp. rose 72 cents to $83.10 as it announced it is selling its hydroelectric assets in the Ottawa and Gatineau, Que.,-area for $45 million. The buyer is Energy Ottawa Inc., the renewable energy subsidiary of Hydro Ottawa Holding Inc.

No major Canadian economic data are scheduled for release today.

ON BAYSTREET

The TSX Venture Exchange doffed 10.59 points to 1,259.11. The Nasdaq Canada index squeezed out a gain of 0.02 points to 368.69

All but four of the 14 Toronto subgroups were up by noon ET. Metals and mining shook off the cobwebs to gain 2%, while financials gathered 1%, and gold gained 0.8%.

The four laggards were weighed by telecoms, down 0.6%, while energy and utility stocks lost 0.4% each.

ON WALLSTREET

U.S. stocks were mixed Wednesday, reversing earlier losses, as investors react to mixed economic news and ongoing concerns about Europe''s debt crisis.

The Dow Jones Industrials fell 21.61 points to break for lunch at 12,552.19

The S&P 500 was 2.17 points lower to 1,322.01. The Nasdaq Composite Index let go of 3.18 points to 2,839.89

Stocks opened lower after reports showed that retail sales remained weak in May and producer prices fell sharply. But the market turned around following a better-than-expected report on U.S. business inventories.

Computer maker Dell said Tuesday that it will start paying dividends to shareholders later this year, boosting its stock by 4.5%.

Philip Morris International announced an $18-billion U.S. share repurchase plan Wednesday. Shares of the company, which was spun off from domestic tobacco company Altria Group in 2008, are up 8% year-to-date.

Shares of Dow component Johnson & Johnson were up 2.4%. The company revealed after the close Tuesday that it will be able to complete its purchase of Swiss medical device maker Synthes on Thursday, much sooner than expected.

It also said the deal will add three to five cents U.S. a share to its earnings this year, rather than shave 22 cents U.S. a share off its profits as it previously forecast.

A survey of 20 investment strategists and money managers suggests that the S&P 500 could rise more than 8%, from its current level above 1,430 -- which means a 14% gain for the year.

Meanwhile, the banking sector will be in the spotlight Wednesday, as JPMorgan CEO Jamie Dimon testifies before Congress.

Prepared remarks released late Tuesday show Dimon will blame insufficient risk controls and a failure by traders to understand the bets they were placing for the loss.

Losses appear to be mounting, and sources tell various media outlets that what originally reported as a $2-billion U.S. loss may have grown to as much as $8 billion U.S. Details on the size of the loss and comments on the need for more regulation during the hearing could hurt shares in the banking sector.

Uncertainty in Europe also weighed on trading Wednesday morning. Investors will continue to watch Spain''s troubled banks, whose exposure to bad real estate loans has led Fitch to downgrade 20 of them in the last two days.

Meanwhile, 10-year Spanish bonds yields eased Tuesday after rising Monday to unprecedented levels, even though European finance ministers agreed to give Spain up to €100 billion ($125 billion U.S.) in aid.

Yields on Italian bonds also remained well above the 6% mark, despite a slight decline. Italy''s auction of €6.5 billion worth of one-year notes came in at a rate of 3.97%.

Economically speaking, business inventories rose 0.4% in April, which was slightly better than expected.

Elsewhere, the Producer Price Index, which measures changes in wholesale prices, dropped 1% in May. Economists surveyed by Briefing.com had expected a decline of 0.7%.

The government''s estimates on retail sales for May showed a decline of 0.2%. This was close to expectations from economists surveyed by Briefing.com.

The price on the benchmark 10-year U.S. Treasury advanced a bit, lowering yields to 1.64% from Tuesday''s 1.66%. Treasury prices and yields move in opposite directions.

The price of a barrel of oil regained 40 cents to $83.72 U.S.

Gold futures for August delivery rose $7.70 to $1,621.50 U.S. an ounce.