Stock markets mixed despite positive reports from two Dow stalwarts

CBC News 08:35 PM EDT Apr 23 MALCOLM MORRISON

TORONTO (CP) - Despite a generally positive tone to earnings reports, stock markets were mixed Monday morning as investors wait for a catalyst to take markets higher.

Information technology shares helped keep Toronto's S&P/TSX composite index in positive territory, up 18.79 points to 6,544.47 at late morning, after gaining 1.5 per cent last week.

The TSX Venture Exchange was up 3.79 at 1,049.96.

The Canadian dollar was down 0.05 cent to 68.83 cents US.

New York's Dow Jones industrial average edged 11.48 points lower to 8,326.17, after rising 1.6 per cent on the week.

The Nasdaq slipped 5.03 points to 1,420.47; the tech-laden index had climbed 4.9 per cent last week. The S&P 500 index was off 2.18 points to 891.4.

"It continues to be a story of cross-currents - a bit of good news, a bit of bad news," said Patricia Croft, managing partner at Sceptre Investments.

"This just leaves people in a quandary, not knowing which way to go, so it feels like more of the same again."

Investors generally liked what they saw in corporate reports Monday.

3M, best known for Scotch Tape and Post-it Notes, said its quarterly profit rose to $502 million US from $452 million a year ago. Sales were up 11 per cent and 3M stuck to its earnings outlook for 2003. Its shares nudged four cents higher at $130.02.

Shares in American drug giant Merck jumped $1.30 to $57.19 after it earned $1.71 billion, compared with $1.63 billion a year ago. Sales rose 10 per cent, slightly ahead of expectations.

Whirlpool lost 38 cents to $53.30 US after the appliance maker notched a first-quarter profit but lowered its 2003 outlook, citing the uncertain economy.

"People are looking very closely at the quality of earnings," Croft said.

"And so you can beat in the quarter, but if it's all through cost-cutting then it doesn't leave you feeling a lot better about the prospects ahead."

One area unlikely to cause disappointment is the Canadian energy companies. The top oil and gas companies start reporting Tuesday and soaring prices because of the Iraq war, civil unrest in Venezuela and a long, bitter North American winter will result in substantially higher profits.

Energy stocks were higher in anticipation of those reports, with Petro-Canada ahead 48 cents to $48.06 and Shell Canada up 64 cents to $48.

Also supporting energy stocks was an oil price holding above $30 US a barrel. Crude futures were 15 cents higher at $30.70 US a barrel in New York, ahead of an OPEC meeting Thursday which is expected to tighten crude supplies.

All sectors of the Toronto stock market were higher except financials.

Information technology led the advance. Nortel Networks was ahead 13 cents to $3.62 and Zarlink Semiconductor up 18 cents at $7.12.

The gold sector also lent support as the price of the metal climbed $3.70 to $330.70 US an ounce in New York. Kinross Gold gained 30 cents to $9.35 and Placer Dome was ahead 20 cents to $14.70.

Nevsun Resources soared 47 cents to $3.55. The Vancouver-based mine explorer's shares had dropped last week after one of its geologists was murdered near its camp in Eritrea.

Active Toronto stocks included Rogers Communications, ahead 61 cents to $18.60; CAE, down four cents to $3.25; and Tour operator Transat A.T., off five cents to $4.15.

Monday's Canadian corporate reporters include Methanex, the world's largest producer of methanol, and base-metal miner Teck Cominco.

Other big Canadian companies reporting this week include Canadian National Railway, CP Rail, steelmakers Dofasco and Stelco, miner Noranda, CP Ships, software maker Open Text, Goldcorp Inc., Manulife Financial and printer Quebecor World.

On Friday, Air Canada is scheduled to report, as the airline continues to operate under protection from creditors, and faces a court hearing Tuesday at which unions, suppliers and creditors are expected to file motions seeking to protect their positions. Air Canada declined three cents to $1.15.

In economic news, a key indicator of short-term future economic activity in the United States declined in March. The Conference Board said its index of leading economic indicators lost 0.2 point last month to 110.6, pushed down by worries over higher oil prices, the war and potential terrorist attacks.

Most overseas financial markets were closed for Easter Monday, but Tokyo's Nikkei stock average gained 94.57 points to 7,969.08.

Singapore's Straits Times index ended at a three-week low on worries about SARS, as the Health Ministry moved to quarantine all 2,400 workers at the city-state's largest wholesale vegetable market.