The Toronto stock market was up sharply for a second session Wednesday as traders continued to pick up stocks that have been beaten down amid concern about the potential global impact of the European Union’s drawn-out debt crisis.
The S&P/TSX Composite Index gained 125.69 points, or 1.1%, to close the day at 11,633.40
The Canadian dollar ballooned 0.93 of a cent to 97.30 cents U.S.
Buyers moved in following a drop of almost 2% last week that left the market down about 10% from the highs of 2012 in late February.
Energy prices have been buffeted over the past few weeks as the worsening euro-zone crisis has stalled an already fragile global economic recovery with commodities hitting multi-month lows. Suncor Energy gained 91 cents, or 3.2%, to $29.21.
Prices for copper, viewed as an economic bellwether as it is used in so many applications, jumped six cents to $3.35 U.S. a pound and the base metals sector gained. Teck Resources rose 90 cents, or 2.9%, to $32.31.
The gold sector tailed off a bit, even as Iamgold Corp. gained 14 cents to $12.82.
Traders also took in a major shakeup of the senior management at Canada’s biggest gold company, which has been disappointed by its stock performance.
Barrick Gold Corp. says Aaron Regent has been replaced as president and chief executive officer by Jamie Sokalsky, who was the Toronto-based company’s chief financial officer. Barrick stock fell $2.20, or 5%, to $41.50
Financials were also supportive, as Scotiabank moved ahead 45 cents to $52.20.
Laurentian Bank’s B2B Trust will pay about $415.5 million in cash to acquire the trust operation of AGF Management Ltd., with the latter saying it will use proceeds from the deal to strengthen its core business. AGF’s shares gained 52 cents, or 4.4%, to $12.24.
Laurentian Bank also said that it will boost its quarterly dividend by two cents to 47 cents per common share. Laurentian shares gained $1.11 to $42.35.
ON BAYSTREET
The TSX Venture Exchange gained 17.07 points to 1,302.64. The Nasdaq Canada index tacked on 12.10 points to 368.08
All but three of the 14 Toronto subgroups were positive on the day, following a 3.3% surge by metals and mining issues. Energy stocks soared 2.6%, and global base metals stocks strengthened 2.3%.
The three laggards were in health-care and gold, each down 1.2%, and materials, fading 0.2%.
ON WALLSTREET
U.S. stocks rallied Wednesday as investors grew hopeful that more stimuli for the global economy are around the corner.
The Dow Jones Industrials zoomed higher by 286.84 points, or 2.4%, to 12,414.80, pushing the blue-chip index back into positive territory for 2012.
The S&P 500 was 26.86 points better to 1,312.36. The tech-rich Nasdaq Composite Index was up 66.61 points to 2,844.72
U.S. financial stocks led the broad-based rally. Shares of Bank of America, Citigroup, Morgan Stanley and JPMorgan Chase all advanced.
Nasdaq OMX Group said it plans to spend $40 million U.S. to compensate trading firms for losses caused by glitches in Facebook's IPO.
Facebook shares rebounded Wednesday, after hitting a new low of $25.52 U.S. Shares are more than 30% below the IPO price of $38 U.S.
Chesapeake Energy is in advanced talks to sell almost all of its pipeline assets for more than $4 billion U.S. to Global Infrastructure Partners, according to a Bloomberg report, which lifted Chesapeake shares.
Shares of Hovnanian jumped after the homebuilder posted a second-quarter profit as home sales jumped.
Tempur-Pedic International shares lost half their value after the mattress company said it expects its second-quarter profit to plunge 50% amid increased competition. The company also slashed its outlook for the year.
Investors were encouraged after Atlanta Fed president Dennis Lockhart, who is a member of the Federal Reserve's policy-setting committee, said that continuing Operation Twist is now "an option on the table." The policy, which swaps short-term bonds for ones with a longer duration in order to keep interest rates low, is currently set to expire at the end of the month.
The E.C.B. left interest rates steady at 1%, though the decision was not unanimous, E.C.B. President Mario Draghi told reporters after the meeting.
Draghi also said that the central bank will continue to monitor developments closely and stands ready to act if necessary.
The E.C.B. is under pressure to take additional steps to support the economy and restore confidence in financial markets.
But Draghi stressed that monetary policy cannot make up for a lack of action by euro area political leaders.
The European Union also unveiled a plan early Wednesday that would call for a Europe-wide banking union, which would deal with future banking crisis on the continent, rather than leaving them in the hands of their already struggling national governments. A specific size of the rescue fund to be created was not disclosed though.
Eurostat, the statistical office of the European Union, did not revise its estimate of first-quarter gross domestic product, the broadest measure of the economy.
The agency said the 17 nations that use the euro saw a 0.1% decline in GDP in the quarter, while the 27 nations in the European Union had a combined 0.1% increase. The figures were an improvement from the fourth quarter's decline of 0.3% in both the euro-zone and the E.U.
Economically speaking, the U.S. Federal Reserve's Beige Book, a report covering economic activity in the bank's 12 regional districts, suggested that the overall economy expanded at a moderate pace in April and May. While the economic outlook remains positive, the Fed said its "contacts were slightly more guarded in their optimism."
First-quarter productivity was revised to a 0.9% decline from a previous estimate of a 0.5% decline. Analysts were expecting a drop of 0.8%.
The price on the benchmark 10-year U.S. Treasury fell, raising yields to 1.65% from Tuesday’s 1.56%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil gained 75 cents to $85.04 U.S.
Gold futures for June delivery climbed $17.30 to settle at $1,634.20 U.S. an ounce.
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