North American stock markets were in rally mode Monday as traders felt that cool heads will prevail and American politicians can come together to agree on a budget deal by the end of next month.
Without such a deal, the U.S. economy risks going over a so-called fiscal cliff — a severe setback from a combination of automatic spending cuts and the expiration of Bush-era tax cuts.
The S&P/TSX Composite Index moved higher by 138.20 points, or 1.2%, to approach noon at 12,015.92
The Canadian dollar hiked 0.43 to 100.35 cents U.S.
On the TSX, the telecom sector was in focus after BCE Inc. and Astral Media Inc. said they are submitting a new acquisition proposal to the CRTC, saying they’ve found ways to address the regulator’s concerns over the level of ownership concentration in some markets.
The CRTC recently rejected the original $3.4-billion proposal for Bell Canada’s parent to buy the Montreal-based radio, television and media company. BCE shares gained 16 cents to $42.15 while Astral shares climbed $1.45 or 3.3% to $45.85.
The tech sector was the biggest advancer as Open Text rose $1.66 to $55.01 while Research In Motion Ltd. climbed 28 cents to $9.51.
The energy sector rose as oil prices gained ground for a second day on worries that oil supplies could be disrupted if the Israel-Hamas conflict engulfs countries elsewhere in the Middle East, a huge producer of crude.
In the energy sector, Cenovus Energy improved by 86 cents to $33.25 while Suncor Energy gained 89 cents to $32.43.
The appetite for added risk extended to metals and December copper was eight cents higher to $3.53 U.S. a pound, taking the base metals sector up. First Quantum Minerals rose 41 cents to $21.39 while Turquoise Hill Resources advanced 12 cents to $7.69.
The gold sector climbed as Goldcorp Inc. was ahead 80 cents to $40.52 while Centerra Gold climbed 37 cents to $9.45.
Financials ahead, as Royal Bank was 70 cents higher to $56.329 while Scotiabank was up 41 cents to $53.24.
The industrials group was up while Bombardier Inc. advanced six cents to $3.18.
In other corporate developments, the largest shareholder of Agrium Inc. wants to shake up the Canadian fertilizer company’s board by installing its managing partner and four new independent directors, including a former federal agriculture minister.
Jana has called on Agrium to spin off its retail arm as a separate company from its fertilizer business in order to unlock shareholder value. Agrium has rejected that idea and its shares were up $1.89 to $99.70.
ON BAYSTREET
The TSX Venture Exchange climbed 14.13 points to 1,249.47
All 14 Toronto subgroups were positive by noon, led by gold, up 1.9%, while materials and energy each gained 1.8%.
ON WALLSTREET
U.S. stocks rallied Monday as investors started the holiday-shortened week optimistic that fiscal cliff negotiations in Washington are progressing.
The Dow Jones Industrials approached noon hour ET Monday up 172.40 points, or 1.4%, to 12,760.70, with financial stocks Bank of America and JPMorgan Chase leading the way.
The S&P 500 grew 21.31 points to 1,381.19, and the Nasdaq Composite Index gained 50.73 points to 2,903.86
Gains, however, may be tempered by escalating violence in the Middle East between Israel and Palestinian group Hamas. Oil prices have been ticking up amid growing concern about a possible ground war in Gaza.
Trading could be choppy this week as investors try to position themselves ahead of the Thanksgiving holiday. Markets will be closed Thursday and have a shortened day Friday
Shares of Intel slipped slightly after the company said CEO Paul Otellini will retire in May. The board of directors will conduct a search for his successor.
Shares of Lowe's gained ground after the home improvement retailer reported better-than-expected earnings of 40 cents U.S. a share on sales of $12.1 billion U.S.
Nokia shares jumped on reports that its Lumia 920 sold out in Germany, and shares of Best Buy jumped on a report that the retailer might consider a lower buyout bid from founder Richard Schulze.
Shares of Lions Gate Entertainment and a number of movie theater chains, including Regal Entertainment Group, Cinemark Holdings and Carmike Cinemas could get a lift from the $141.3-million opening weekend for “Twilight: Breaking Dawn Part Two” It's the fourth movie this year to open above the $140-million U.S. mark.
Dealing with the economy, two better-than-expected reports on the housing market also gave markets a lift. Existing home sales rose 2.1% to an annual rate of 4.79 million in October, despite the impact of Superstorm Sandy.
That compares with analysts' estimates for a rate of 4.70 million. And the National Association of Home Builders' sentiment index rose for a seventh straight month to 46, its highest level since May 2006. Analysts were expecting a reading of 42.
The price on the benchmark 10-year U.S. Treasury fell sharply, lifting yields to 1.62% from Thursday’s 1.57%. Treasury prices and yields move in opposite directions.
Oil prices jumped $2.12 to $89.04 U.S. a barrel.
Gold prices added $18.40 an ounce to $1,733.10 U.S.
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