Toronto stock market set to rise on earnings news, strong manufacturing data

Toronto at Dusk/ Photo by Benson Kua/ CC BY-SA 2.0

The Toronto stock market was set for a sharply higher open Thursday amid encouraging Chinese and European manufacturing data and strong earnings reports.

The Canadian dollar rose 0.04 of a cent to 93.25 cents US.

U.S. futures were higher as traders digested reports from a slew of companies, including social network site Facebook and automaker Ford.

The Dow Jones industrial futures gained 27 points to 17,052, the Nasdaq futures were ahead 15.3 points to 3,990.8 and the S&P 500 futures rose four points to 1,9894.

Resource stocks on the Toronto market were expected to take off in the wake of data showing China’s manufacturing rose in July to its highest level in 18 months.

The preliminary HSBC purchasing managers’ index rose to 52.0 in July from 50.7 in June. A reading above 50 indicates expansion.

And in Europe, financial information company Markit said Thursday that its purchasing managers’ index rose to a three-month high of 54 points in July from 52.8 in June. Much of the increase was due to ongoing economic strength in Germany, Europe’s biggest economy. However, Markit also found businesses in the “periphery’’ countries outside of Germany and France expanding at their fastest pace since 2007.

Overall, Markit says the eurozone is growing at a 0.4 per cent quarterly tick, which equates to an annualized 1.6 per cent rate.

Meanwhile, investors waded through a deluge of earnings reports.

In Canada, Teck Resources Limited (TSX:B) reports a second-quarter net profit of $80 million, or 14 cents share, compared with $143 million, or 25 cents per share, a year ago. Adjusted profit, excluding items, was $72 million, or 13 cents per share, a penny better than estimates.

Loblaw Companies Ltd. (TSX:L) posted a quarterly loss of $456 million, or $1.13 per share with results hit by costs involving the acquisition of Shoppers Drug Mart. Revenue was up 37 per cent to $10.3 billion while adjusted earnings of 75 cents a share beat estimates by eight cents a share.

Rogers Communications Inc. (TSX:RCI.B) reports a second-quarter net income of $405 million, or 76 cents per diluted share, down 24 per cent from $532 million, or 93 cents, in the same quarter of 2013. Revenues were flat year-over-year at $3.2 billion. Adjusted net income, excluding items, was $432 million, or 84 cents, which met expectations.

In the U.S., Facebook shares were up about nine per cent in pre-market trading as the social networking site beat on earnings and revenue.

And Ford Motor Co. beat expectations in the second quarter as it chalked up a record profit in North America and made money in Europe for the first time in three years. Net income rose six per cent to $1.3 billion in the April-June period. Ex-items, Ford earned 40 cents per share, a dime better than forecasts and its shares were up one per cent in pre-market trading.

On the commodity markets, September crude declined 23 cents to US$102.89 a barrel.

The Chinese manufacturing data sent September copper up five cents to US$3.26 a pound, while August gold was down $5.80 to US$1,298.90 an ounce.