TORONTO (CP) — The Toronto Stock Exchange ended the day higher on Thursday, helped by strength in the energy stocks as some big names in the sector announced plans to cut costs in releasing their quarterly results.
The S&P/TSX composite index gained 80.98 points to 14,382.78 as Suncor Energy said it plans to cut its capital spending and Cenovus Energy slashed its dividend and announced job cuts.
Roland Chalupka, chief investment officer of Fiduciary Trust Canada, a unit of Franklin Templeton Investments, said investors are looking for oil company earnings to improve in the third quarter as the year-over-year comparison begins to reflect the slide in oil prices that began in July 2014.
“Oil investors have been punished in recent months and I think this is a little bit of somewhat unexpected good news that the worst is over,” he said.
Cenovus said in its earnings report on Thursday that it will cut 300 to 400 workers from its Calgary office, on top of 800 positions it eliminated in February, as well as reduce its dividend by 40 per cent.
Suncor said it will trim capital spending by $400 million for the year as it announced its quarterly results on Thursday.
The energy sector of the TSX gained 2.9 per cent on the day. The price of oil has fallen by more than half since this time last year.
The mining and metals sector dropped five per cent as key companies were pressured by expenses and a decline in prices.
In the U.S., the Dow Jones industrial average fell 5.41 points to 17,745.98, while the Nasdaq climbed 17.05 points to 5,128.78 and the S&P 500 slipped 0.06 points to 2,108.63.
The loonie fell 0.4 of a cent to 76.86 cents U.S. as the greenback gained strength from positive economic data.
On Thursday, the American government said its GDP rose at an annualized 2.3 per cent in the second quarter and revised its estimate for the first quarter from a small loss to a larger gain.
“It’s not so much a Canadian dollar weakness story as it is a U.S. dollar strength story,” Chalupka said.
The Canadian dollar could hold steady at this rate as long as economic growth stays relatively in line with American results, he said, but the spread could widen as the U.S. central bank looks to raise interest rates in the fall.
On the commodity markets, the September contract for crude oil fell 27 cents to US$48.52, while the September natural gas contract fell 9.6 cents to US$2.768.
The December gold contract, which showed the heaviest volume of trading, slipped US$4.60 to US$1,088.70.
Gold miners Goldcorp Inc., Kinross Gold and Agnico Eagle all promised to cut costs and focus on efficiency as they reported quarterly earnings this week. The gold sector is feeling the effects of the continued slide of the commodity, which has lost 40 per cent of its value since 2011.
Peter Henderson, The Canadian Press
