The S&P/TSX composite index pushed its way back into positive territory today -- closing up 225.84 points to 10,055.39 -- snapping a five-session losing streak after a surprise interest rate cut, in a coordinated move with other central banks in Europe and North America.
The Bank of Canada unexpectedly cut its key interest rate by 50 basis points to 2.50 percent on Wednesday in a coordinated effort with other central banks to help calm ailing financial markets.
In a statement that left the door open to further rate cuts, the bank said the intensification of the global financial crisis was impacting all countries and that conditions in global financial markets have worsened considerably.
Also -- Canadian housing starts remained strong in September, running at an annualized rate of 217,600 units -– but with noticeable weakness in Ontario. Last month's rate of new home construction was up a slight 200 units from August, according to data from Canada Mortgage and Housing Corp.
Down south -- the National Association of Realtors reported an index of sales contracts on previously owned U.S. homes climbed 7.4 percent in August from the prior month.
In earnings -- Sandvine Corp. on Wednesday reported a loss for the third quarter compared to a profit last year, hurt by a 38 percent decline in revenues and higher expenses. Net loss for the third quarter was $6.26 million or $0.046 per share compared to a net income of $2.70 million or $0.020 per share last year. Total revenues for the quarter plunged to $13.13 million from $21.18 million in the same period of last year.
The Canadian dollar, meanwhile, was trading down 1.54 cents to 88.95 cents US.
BAYSTREET
Nine of the TSX sub-groups traded higher today -- gold stocks surged 19.10 percent followed by a 12.27 percent gain in material issues and a 2.99 percent rise in material stocks.
COMEX gold for December delivery rallied $24.50 to $906.50 US an ounce.
On the downside -- real-estate stocks were off 2.43 percent; utility issues shed 2.28 percent and energy stocks fell 0.51 percent.
Meanwhile, the TSX Venture Exchange was off 21.82 points to 1,072.64 while NASDAQ Canada stocks were up 17.22 points at 579.25.
ON WALLSTREET
U.S. stocks thudded lower on Wednesday in a late-session tailspin that followed wild swings into positive and negative turf after central banks around the globe axed interest rates in an attempt to unleash troubled credit markets.
The Dow Jones Industrial Average, which traded erratically in a 433-point range during the day, ended down 189.01 points, or 2 percent, to 9258.10, and the S&P 500 lost 11.29 points, or 1.1 percent, to 984.94. The Nasdaq fell 14.55 points, or 0.8 percent, to 1740.33.
The European Central Bank trimmed its key refinancing rate to 3.75 percent from 4.25 percent, while the Bank of England cut its rate to 4.5 percent from 5 percent. China's central bank slashed its one-year benchmark lending and deposit interest rates, while the Bank of Japan sat out the moves, but issued a statement backing the actions, which also included rate cuts by the Bank of Canada, the Swiss National Bank and the Swedish Riksbank.
Back in the U.S -- today marked the first day of trading in which the Securities and Exchange Commission's temporary ban on short-selling of more than 900 financial stocks would be lifted. The ban, implemented in mid-September, was set to expire at midnight, and the SEC gave no sign it would extend the ban.
As for company news -- the Wall Street Journal reported Citigroup is looking for partners in its buyout of Wachovia. Citi and Wells Fargo had earlier agreed to cease their buyout battle for Wachovia until noon Wednesday.
Bank of America Corp. shares fell 7 percent after the company priced a secondary offering of common stock below its closing price, with the move diluting existing shares by about 10 percent.
To kick off earnings season, aluminum processor and Dow component Alcoa reported a decline in third-quarter profit thanks to rising costs and softening demand.
Wal-Mart, the biggest retailer in the world, reported that same-store sales - sales at stores open at least a year - rose 2.4 percent in September, coming in at the low end of what experts expected. Sales were boosted by purchases of essentials like food and clothing. A consensus of analysts compiled by Thomson Reuters had expected an increase of 2.5 percent. Wal-Mart had expected a jump ranging from 2 percent to 3 percent.
Discount retailer Costco Wholesale a 7 percent jump in same-store sales, falling short of the 7.5 percent increase projected by a consensus of analysts compiled by Thomson Reuters. Costco also reported a 7 percent jump in fourth quarter profit to $398 million, or 90 cents per share. Still, that fell short of economist expectations of 93 cents per share. Sales jumped nearly 13 percent to $22.6 billion.
Longer-dated U.S. Treasuries were declining. The 10-year was down 1-17/32 to yield 3.69 percent, and the 30-year was off 1-7/32, yielding 4.10 percent. The American dollar was declining sharply vs. the yen, inching down against the euro and gaining on the pound.
U.S. light crude oil for November delivery dropped $1.11 to close at $88.95 US a barrel US a barrel on the New York Mercantile Exchange.
In its weekly inventory report, the Energy Information Administration said the nation's stockpiles of crude oil surprisingly rose by 8.1 million barrels last week. Analysts were expecting crude stocks to have dropped by 1 million barrels, according to a survey of industry experts by energy research firm Platts.
Gasoline supplies also increased by a bigger-than-expected 7.2 million barrels. Estimates had called for a more modest 2-million-barrel rise.
Related Stories
