The S&P/TSX composite index rebounded higher today -- up 467.83 points to 11,752.90 -- following a massive selloff in the previous session -- as bargain-hunters snapped up beaten down shares and Washington offered traders hope of a new bailout package for its troubled financial sector by the end of the week.
In corporate news -- analysts slashed the stock price target of Forzani Group and lowered its earnings-per-share estimates on Tuesday following disappointing same-store sales and amid worries over a slowing retail outlook.
U.S. regulators gave Canadian Pacific Railway Ltd. the green light on Tuesday to take control of Dakota, Minnesota & Eastern Railroad Corp, which could eventually bring a third railroad to lucrative western U.S. coal fields. The Surface Transportation Board said the $1.5 billion acquisition, announced last year, would not lessen competition in the rail industry, and no shippers would lose the option of competitive services because of the takeover.
On the data front -- the Canadian economy grew 0.7 percent in July -- well ahead of the 0.2 percent increase projected by private-sector economists. The July growth in gross domestic product reported by Statistics Canada on Tuesday followed a rise of 0.1 percent in June and a retreat of 0.1 percent in May.
Also -- a sharp decrease in prices for petroleum products triggered a 0.2 percent drop in Canadian producer prices in August, the first monthly decline since late 2007, Statistics Canada said on Tuesday.
Raw materials prices plunged 7.7 percent in the month mainly due to falling prices for mineral fuels. This was the first downturn in prices after 10 months of increases.
The Bank of Canada said Tuesday it will auction $4 billion worth of 28-day purchase and resale agreements on Wednesday and is selling $4 billion of its holdings of treasury bills as it works to lubricate seized-up credit markets.
Down south -- the Case-Shiller home-price index fell 16.35 percent year over year for July, a slightly wider decline than the 16 percent expected by economists.
The Chicago Purchasing Managers Association is set to release its September manufacturing index. The Conference Board's consumer confidence survey is also due this morning.
The Canadian dollar, meanwhile, was trading down 1.61 cents to 93.89 cents US after falling 1.03 cents Monday.
BAYSTREET
Twelve of the TSX sub-groups traded higher today -- mining stocks were up 7.59 percent followed by a 5.80 percent gain in energy issues and a 5.38 percent rise in financial issues.
On the downside -- gold stocks shed 0.76 percent.
COMEX gold for December delivery fell $13.60 to $880.80 US an ounce. Like oil, gold prices rallied during the biggest periods of unrest over the last few weeks.
Meanwhile, the TSX Venture Exchange was up 32.97 points to 1,415 while NASDAQ Canada stocks were ahead 49.75 points at 705.48.
ON WALLSTREET
U.S. stock indexes on Tuesday roared back from the prior session's historic drop, with the Dow Jones Industrial Average chalking up its third-biggest point gain on optimism that a rescue plan would make a comeback in coming days on Capitol Hill.
The Dow Jones Industrial Average jumped 485.21 points, or 4.7 percent, at 10,850.66, and the S&P 500 added 58.34 points, or 5.3 percent, to 1164.73. The Nasdaq climbed 98.6 points, or 5 percent, to 2082.33.
Members of Congress sought to reassure their consituents that a new bailout bill is coming. ''Doing nothing is not an option,'' House Majority Leader Steny Hoyer said in the wake of the first bill's defeat, according to the Associated Press.
President Bush said he was disappointed the first bill had been rejected but promised to continue working with congressional leaders. ''This is not the end of the legislative process,'' he said on Tuesday morning. He added, ''Our economy is depending on decisive action from the government.''
In corporate news -- Fannie Mae and Freddie Mac are the subjects of a federal grand jury investigation, the firms said. The mortgage backers, which were seized by the government earlier this month, received subpoenas from U.S. Attorney's office in New York and requests from the Securities and Exchange Commission to leave any potential paper trails intact. Freddie said the subpoena it received concerned company activities stretching back to January 2007.
Pfizer plans to exit the business of developing medicines for the heart and circulatory system to dedicate more of its resources to the more lucrative fields of oncology and Alzheimer's disease, The Wall Street Journal reported. The changes are part of a larger program designed to cut costs, which reached $8.1 billion in 2007, and lift profits.
In the technology space -- Microsoft CEO Steve Ballmer warned that all companies were vulnerable to the global economic crisis. He predicted a slowdown in spending by businesses as well as consumers. Microsoft added 6.7 percent to $26.69.
Longer-dated U.S. Treasury securities were falling in price. The 10-year was down 2-4/32 to yield 3.83 percent, and the 30-year was giving back 3-16/32, yielding 4.31 percent. The American dollar was rising vs. its major foreign competitors.
U.S. light crude oil for November delivery rose $4.27 to settle at $100.64 US per barrel on the New York Mercantile Exchange. On Monday, oil prices plunged $10.52 a barrel in the second-biggest one-day plunge ever.
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