News that one of the top contenders to head the U.S. Federal Reserve has withdrawn his candidacy sent North American markets higher Monday, as investors bet that stimulus funding from the central bank will continue to flow.
The S&P/TSX composite index jumped 103.17 points to greet noon at 12,826.57
The Canadian dollar was up 0.01 cents to 96.94 cents U.S.
Economist Lawrence Summers has long been perceived as an opponent to the Fed's aggressive bond-buying program, which has helped push down interest rates to spur lending and jump start economic growth following the financial and economic crisis five years ago. The program, dubbed quantitative easing, has also weakened the dollar and boosted stock markets.
Summers' withdrawal to succeed current Fed chairman Ben Bernanke means Fed vice-chair Janet Yellen, believed to be a supporter of the stimulus program, may be next in line for the top job.
December copper was up three cents at $3.24 U.S. a pound. Teck Resources took on 26 cents to $28.30
On the corporate front, Aimia Inc. announced it has reached an agreement with TD Bank Group and the Canadian Imperial Bank of Commerce for its popular Aeroplan loyalty credit card programs. Each bank will have rights to half the portfolio of accounts that offer their customers loyalty points, which can be exchanged for airline tickets and other goods through Aimia's flagship Aeroplan program.
Shares in Aimia rose more nearly 5%, or 82 cents, to $17.45. TD shares were up 1.2%, or $1.07, to $90.99, while shares in CIBC jumped 1.1%, or 86 cents, to $81.99.
TD said it expects to acquire approximately 550,000 cardholder accounts from CIBC, representing approximately $3 billion in card balances and $20 billion in annual retail spending.
CIBC, which has been the primary Aeroplan credit card issuer for more than 20 years, will retain the half of the portfolio. That will include Aerogold customers with broader relationships with the bank.
Meanwhile, Bombardier flew the first test flight of its CSeries commercial aircraft Monday morning.
The flight sets off a year of testing, leading to delivery of the first aircraft, which seats 110- to 125-seat CS100 and is slated to enter into service in about a year. The heavily anticipated first flight had been delayed three times over nearly nine months. Its shares climbed 2%, or 10 cents, to $5.09.
On the economic slate this morning, Statistics Canada reported that foreigners bought more Canadian securities, adding $6.1 billion to their holdings in July, following a $15.4-billion divestment in June. Meanwhile, Canadian investment in foreign securities slowed to $0.9 billion and focused on bonds.
Also, figures released by the Canadian Real Estate Association showed home sales rose 2.8% from July to August. Actual activity came in 11.1% above levels in August 2012.
ON BAYSTREET
The TSX Venture Exchange slid back 0.52 points to 940.98
All 14 Toronto subgroups remained higher at the noon hour ET, with information technology chugging ahead 2.2%, while metals and mining advanced 1.4%, and real-estate took on 1.3%.
ON WALLSTREET
The S&P 500 is once again approaching a record high, as investors welcomed the withdrawal of Larry Summers from the race to become next chairman of the Federal Reserve.
The Dow Jones Industrials ballooned 161.68 points, or 1.1%, to break for lunch at 15,537.70
The S&P 500 index gained 15.06 points to 1,703.05. The NASDAQ poked ahead 13.21 points to 3,735.39
The blue-chip index rose nearly 1% in midday trading Monday and is just a handful of points below its all-time peak of 1,709 from early last month.
The day's rally was broad, with all 10 sectors of the S&P 500 moving higher.
Housing stocks were among the biggest winners, with shares of Pulte Group, DR Horton, and Lennar all up more than 3%.
But even though the entire market was moving higher, Apple was a clear laggard. Shares were down more than 2% as investors continued to punish the stock after analysts were disappointed by the new iPhone 5S and iPhone 5C.
On the economic front, manufacturing activity in New York unexpectedly slowed in September, according to report from the New York Federal Reserve. A separate report showed that industrial production rose the most in six months, although slightly slower pace than estimates, while capacity utilization grew in line with forecasts.
Prices for the 10-year U.S. Treasury were up sharply, lowering yields to 2.81% from Friday’s 2.90%. Treasury prices and yields move in opposite directions.
Oil prices dropped $1.21 to $107 U.S. a barrel.
Gold prices strengthened $7.60 at $1,316.20 U.S. an ounce.
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