Toronto market fades into red

The Toronto stock market was modestly lower Wednesday morning even as commodity prices declined in the wake of weak European and Chinese economic data.

The S&P TSX Composite Index faded 0.20 points by midday to 12,623.16

The Canadian dollar skidded 0.34 cents to 99.96 U.S. cents. The greenback rose against other currencies after Fitch ratings agency downgraded Greece further into junk status, from 'CCC' to 'C' following the announcement of the details of the country's debt swap deal with private creditors.

The agency said Wednesday the downgrade indicated "that default is highly likely in the near term." The bond swap deal with private creditors will see €107 billion of Greece's debt held by banks and other private holders of government bonds written off.

On the TSX, a strong earnings report from Rogers Communications Inc. helped send the telecom sector up.

Its shares advanced 57 cents to $38.34 after it said it is increasing its quarterly dividend by 11% to 39.5 cents a share as its fourth quarter profits and revenues improved. Net income grew 8% to $327 million, or 61 cents per diluted share, from $302 million, or 50 cents per share.
Operating revenue grew to $3.18 billion from $3.14 billion.

Meantime, rival telecom Telus Corp. said Tuesday it would raise its dividend to 61 cents a share, up from 58 cents. Telus also said it wants to end its dual-class share structure by converting its non-voting shares into voting shares on a one-for-one basis. Telus shares edged up three cents to $55.93.

The tech sector provided major TSX support despite the Dell disappointment as Celestica Inc. rose 20 cents to $9.43.

The TSX energy sector was ahead as Suncor Energy improved by 41 cents to $35.15.

The base metals sector was ahead with metal prices lower as April copper slipped two cents to $3.82 U.S. a pound after surging 13 cents on Tuesday. Ivanhoe Mines climbed 27 cents to $16.92.

The gold sector was slightly lower with Barrick Gold Corp. fading 11 cents to $48.14.

In the financials sector, Sun Life Financial down 20 cents to $21.27.

In other earnings news, Sears Canada Inc. said Wednesday it earned $38.7 million or 36 cents per share in its latest quarter, which includes the key Christmas retail period. That compared with net profits of $82.7 million or 77 cents per share a year earlier.

Total revenues for the quarter dropped 6.4% to $1.37 billion from $1.46 billion and its shares gained seven cents to $12.02.

ON BAYSTREET

The TSX Venture Exchange dipped 4.25 points to 1,674.38, while the Nasdaq Canada index nipped ahead 0.09 points to 418.94

In all, eight of the 14 Toronto subgroups still trended upward at noon. Information technology stocks led the way, gaining 0.7%, while consumer discretionaries and health-care issues strengthened 0.5% each.

The half-dozen laggards were leadened mostly by real-estate, off 0.8%, while financials slumped 0.4% and utilities ducked back 0.2%.

ON WALLSTREET

In New York, stocks drifted lower Wednesday amid doubts over the latest bailout for Greece and concerns about global economic growth.

The Dow Jones Industrials 48.63 points to approach noon at 12,917.10

The S&P 500 deducted 5.69 points to 1,356.52, while the Nasdaq slipped 18.09 points to 2,930.48

Stocks were pressured early Wednesday by news that an index of business activity in the euro-zone contracted in January. That came after a reading on China manufacturing showed a slow pace of growth.

Corporate earnings season continues. Dell reported results after the closing bell Tuesday, missing analysts' expectations. Shares fell almost 7% in early trading Wednesday.

Rival Hewlett-Packard will be in focus Wednesday, with quarterly results due after the market closes. Hewlett-Packard is expected to post earnings of 86 cents U.S. per share, down from $1.36 U.S. a year ago, according to Thomson Reuters.

Luxury homebuilder Toll Brothers posted a $2.79-million U.S. loss Wednesday, compared to a $3.42-million U.S. profit last year. The company's revenues declined and missed expectations.

Apple was also in focus, with shares slipping 0.7%, as the tech giant faced Chinese company Proview International in a Shanghai courtroom on allegations that it does not own rights to the iPad trademark in China.

Netflix's stock continued to lose ground after Comcast said that it is working on a new subscription video-on-demand competitor, named "Streampix." But the streaming service will only be available to those who also subscribe to Comcast cable.

Shares of Johnson & Johnson were higher in early trading. Late Tuesday, the company announced that CEO Bill Weldon will step down in April.

Chinese Internet giant Alibaba, which has been in the headlines lately for its tussles with stakeholder Yahoo, wants to take its publicly traded Web portal private.

Meanwhile, investors remain skeptical about the latest bailout for Greece, which euro-zone finance ministers approved Tuesday after weeks of negotiations and market speculation.

While the agreement suggests Greece will avoid a default in the near term, analysts warn that the nation will eventually need more support. Greece's fate also depends on whether private sector investors agree to a historic debt reduction plan.

Economically speaking, existing-home sales rose 4.3% in January to a seasonally adjusted annual rate of 4.57 million, according to the National Association of Realtors.

Economists were expecting a sales rate of 4.5 million, according to consensus estimates from Briefing.com.

Treasury prices for the 10-year note gained slightly, lowering yields to 2.02% from Tuesday's 2.04%. Treasury prices and yields move in opposite directions.

Oil for February delivery slipped 44 cents to $105.81 U.S. a barrel.

Gold futures for April delivery fell four cents to $1,758.10 U.S. an ounce.