(Photo: Alcoa)
TORonTO — The Toronto stock market was set for a higher open Wednesday as traders digested a better than expected earnings report from resource giant Alcoa Inc. and looked ahead to data coming out this afternoon that will provide information on what U.S. Federal Reserve officials discussed at their last big interest rate meeting.
The Canadian dollar was little changed, down 0.05 of a cent to 91.51 cents US.
U.S. futures were positive with the Dow Jones industrial futures ahead 34 points to 16,214, the Nasdaq futures rose 8.8 points to 3,537.3 and the S&P 500 futures gained 2.5 points to 1,847.5.
Alcoa Inc. lost US$178 million in the first quarter as the price it was paid for aluminum dropped eight per cent from a year ago. The first-quarter loss of 16 cents per share compared with net income of $149 million, or 13 cents per share, in the same period last year. 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 three per cent in pre-market trading in New York.
Elsewher on the earnings front, Montreal-based discount chain Dollarama is upping its quarterly dividend to 16 cents from 14 cents. The retailer also posted a quarterly net profit of $83 million 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.
Meanwhile, investors looked for the mid-afternoon release of the minutes of the Feds 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.
Post-meeting, Chair Yellen added some (and perhaps too much) clarity by saying that rate hikes could begin around six months after the asset purchase program ends; in other words, as early as next Spring, observed BMO Capital Markets senior economist Sal Guatieri.
We still look for a mid-2015 move.
In other corporate developments, automaker Toyota is recalling 6.39 million vehicles globally for a variety of problems spanning nearly 30 models. No injuries or crashes have been reported related to the recalls but two reports of fires are linked to one of the problems, a defective engine starter that can keep the motor running. Its shares slipped 1.25 per cent in pre-market trading.
Prices were mixed on the commodity markets with May crude on the New York Mercantile Exchange up 14 cents to US$102.70 a barrel.
May copper was down two cents to US$3.03 a pound while June bullion fell $5.10 to US$1,304 an ounce.
European bourses advanced with Londons FTSE 100 index ahead 0.77 per cent, Frankfurts DAX climbed 0.26 per cent while the Paris CAC 40 rose 0.4 per cent.
Earlier in Asia, Tokyo shares tumbled as disappointment spread that the Japanese central bank didnt announce additional stimulus. Other Asian bourses rose.
The Nikkei 225, the benchmark for the Tokyo Stock Exchange, finished down 2.1 per cent, Hong Kongs Hang Seng rose 0.8 per cent and South Koreas Kospi added 0.3 per cent.
