North American stock markets ran up sharply as resource stocks were boosted by the Chinese government’s assurances that it will stick to its economic growth target for the year and traders were encouraged by generally positive U.S. data.
The S&P/TSX composite index leaped 83.54 points to greet noon at 12,790.95
The Canadian dollar slipped 0.15 cents at 97.18 cents U.S., a day before the Bank of Canada makes its next announcement on interest rates. The bank could signal that interest rate hikes are even further down the road than thought because of persistent economic weakness.
Two of Canada’s biggest corporations were also in the spotlight after Scotiabank delivered quarterly earnings that beat expectations while telecom BCE Inc. received regulatory approval of its proposed $3.38-billion takeover of Astral Media Inc.
The Competition Bureau approved the BCE-Astral deal with some major strings attached — the telecom company will have to sell several of Astral’s pay and specialty television channels. BCE shares gained 30 cents to $47.05.
The bureau said that without the sale of those channels the deal would likely have led to higher prices and reduced choices for television programming. The deal still requires approval from the CRTC.
In the financial sector, Scotiabank had $1.63 billion of net income or $1.25 a share in the latest quarter, up 13 per cent from a year ago.
Ex-items, the bank’s earnings were $1.27, two cents better than expectations. Scotiabank also hiked its quarterly dividend by three cents to 60 cents a share and its shares gained 72 cents to $61.59.
Hopes for rising demand from China helped send commodity prices higher.
The base metals sector gained while May copper on the Nymex rose two cents to $3.52 U.S. Teck Resources gained 55 cents to $30.80 while First Quantum Minerals was ahead 48 cents to $18.57.
The gold sector improved as Barrick Gold Corp. climbed 50 cents to $29.89 and Goldcorp Inc. advanced 36 cents to $33.26.
In the energy sector, Cenovus Energy advanced 53 cents to $32.35.
The financials sector gained 0.8 per cent with Manulife Financial up 24 cents to $15.44.
The utilities sector was the sole decliner as Atlantic Power fell 26 cents to $5.80.
Meanwhile, the Canadian retail landscape starts to undergo a big change today. U.S. discount giant Target opened the first of its Canadian outlets in three Ontario locations (Guelph, Fergus and Milton). The Minneapolis-based retailer is expected to open between 125 and 135 locations in Canada this year, starting in Ontario.
ON BAYSTREET
The TSX Venture Exchange recovered 15.89 points to 1,113.06
All but one of the 14 Toronto subgroups were higher by noon, led by global base metals, up 1.6%, metals and mining, soaring 1.2%, and health-care, 1.1% more robust.
The lone naysayer was in utilities, off 0.6%.
ON WALLSTREET
The Dow Jones industrial average rallied to a new record high Tuesday.
The Dow spiked 136.94 points, or 1%, to 14,264.80. That topped both the Dow's intraday and closing records that were set in October 2007.
The S&P 500 index picked up 16.5 points to 1,541.70, and is trading at its highest level since October 2007. It is now only about 1.5% away from its record closing high -- also set in October 2007. The tech-heavy NASDAQ Composite gained 40 points to 3,222.03.
In corporate news, JC Penney's shares tumbled, as the struggling retailer is in the third week of a court battle with Macy's claims thatMartha Stewart Living Omnimedia violated a previous agreement with Macy's in entering into a new partnership with J.C. Penney.
Genworth Financial Inc shares rose on rumors that the company is planning a sale.
Apple, which hit a new 52-week low on Monday, enjoyed a bounce with the broader market. Shares rose more than 3% Tuesday, but the stock is still down nearly 20% this year.
Meanwhile, Google continues to hit new highs.
After the market close, gun maker Smith & Wesson Holding Co is expected to report strong quarterly results. Gun sales have surged in recent months amid speculation about new gun control laws.
Investors are looking for any signs of progress in talks to end the budget impasse in Washington, known as sequester. The Obama administration has started making $85 billion U.S. of cuts and some federal workers have started getting furlough notices.
Investors are also looking ahead to central bank meetings later this week in Europe, Japan and the U.K., all of which are expected to end with more promises of support the for world's major economies. The week ends with the U.S. jobs report which is forecast to show a pick up in hiring in February.
Prices on the 10-year U.S. Treasury stepped back, raising yields to 1.90% from Monday’s 1.88%. Treasury prices and yields move in opposite directions.
Oil prices gained 31 cents to $90.43 U.S. a barrel.
Gold prices gained $2.80 to $1,574.70 U.S. an ounce.
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