Toronto's financial district is shrouded by fog on December 30, 2011. THE CANADIAN PRESS/Frank Gunn
January 29, 2014 - 5:33 AM
TORONTO - The Toronto stock market looked to open lower Wednesday as emerging markets took measures to protect their currencies while traders awaited an afternoon announcement at the end of the Federal Reserve’s interest rate meeting.
Both of the country's major railways report earnings this week and on Wednesday, Canadian Pacific Railway (TSX:CP) posted $82 million of quarterly net income, or 47 cents per share, up from $15 million or eight cents per share a year earlier. Ex-items, earnings per share came in at $1.91, missing estimates by two cents. Revenue was $1.607 billion, up seven per cent and a quarterly record for Canadian Pacific but also below estimates.
Canadian National Railways (TSX:CNR) reports earnings on Thursday.
The Canadian dollar was up 0.02 of a cent to 89.66 cents US after closing Tuesday at a fresh 4 1/2 year low.
U.S. futures were in the red with the Dow Jones industrial futures off 52 points to 15,824, pressured in part by an earnings disappointment from aircraft maker Boeing.
Boeing reported that it earned $1.23 billion, or $1.61 per share, well ahead of expectations of analysts. Revenue rose seven per cent to $23.79 billion but its shares were down 1.5 per cent in pre-market trading as Boeing delivered a weaker than expected 2014 forecast for both earnings and revenue.
The Nasdaq futures lost eight points to 3,493 and the S&P 500 futures were down six points to 1,782.3.
Global stock markets have stabilized after three turbulent days when investors grew worried about growth in China and other emerging markets.
Chinese data showed a contraction in manufacturing while currencies in countries including India and Turkey came under pressure as investors wondered how they'll be affected by the U.S. Federal Reserve's policy to reduce its monetary stimulus.
The Fed’s massive bond purchases over the last few years has resulted in a stream of cheap money into those markets. But now the central bank is cutting back on those asset purchases.
Nerves were smoothed by the Turkish central bank’s aggressive interest rate hike to stabilize its currency and a rate hike in India while China injected funds into its banking system.
Meanwhile, the Fed issues its statement on rates and the economy at 2 p.m. EST. The central bank is widely expected to announce it is further cutting back on its key stimulus measure, the monthly purchase of bonds, a move that had kept long term rates low and encouraged a rally on equity markets.
The Fed has already tapered its asset purchases by $10 billion a month to $75 billion and is expected to announce it is trimming by a further $10 billion a month.
Elsewhere on the earnings front, after the close Wednesday, long-stumbling Internet company Yahoo said that revenue dropped six per cent in the fourth quarter, the same rate of decline experienced for all of 2013.
Yahoo earned $348 million, or 33 cents per share, a 28 per cent increase from $272 million, or 23 cents per share, a year earlier. Ex-items, Yahoo earned 46 cents per share, seven cents better than forecast. Its shares fell 4.75 per cent in pre-market trading.
On the commodity markets March crude on the New York Mercantile Exchange slipped nine cents to US$97.32 a barrel.
March copper gained a cent to US$3.26 a pound while February gold rose $11.20 to US$1,262 an ounce.
European bourses were negative with London's FTSE 100 index down 0.33 per cent, Frankfurt's DAX lost 0.28 per cent while the Paris CAC 40 fell 0.36 per cent.
Earlier in Asia, Japan’s Nikkei 225 jumped 2.7 per cent, Hong Kong’s Hang Seng rose 0.8 per cent, China’s Shanghai Composite was up 0.6 per cent while South Korea’s Kospi added 1.3 per cent.
News from © The Canadian Press, 2014