Investors -- whether audacious or hopeful -- had themselves some fun on Wednesday, and turned markets around on a dime during afternoon trading, mostly on the backs of banking and energy stocks.
Toronto traders experienced a topsy-turvy session that saw its share of both red and black ink, but greeted the closing bell firmly on the upside.
U.S. stocks rebounded from a two-month low, led by the biggest gain in financial shares in a month, on speculation a plan from President Barack Obama will shore up banks.
The S&P/TSX Composite Index ended the day ahead 252.96 points to 8,757.89
The giant known as ''Big Blue'' provided a better-than-expected profit outlook for 2009. After the market closed Tuesday, IBM said it expects to earn US$9.20 per share this year, or 45 cents per share better than the average analyst estimate.
IBM also said its fourth-quarter profit jumped 12%, easily topping analysts' estimates.
Swedish wireless equipment maker LM Ericsson also reported better-than-expected fourth-quarter profit, although earnings fell by 31%.
The Canadian dollar rose 0.34 of a cent to 79.23 cents U.S.
Sales figures showed that GM has lost its spot as the world's largest automaker. The U.S. automaker's 2008 sales came in a 8.35 million units, down 11% from 2007, while Toyota's group sales totalled 8.97 million, down 4%.
The news came hours after General Motors Corp.'s chief operating officer said the automaker will run out of cash long before the end of the first quarter if it doesn't get the second instalment of government loan money that was due Jan. 16.
Shares in Saskatchewan-based grain handler and farm supplier Viterra Inc.said it expects its pension expenses will be substantially higher this year and it will need to take a writedown on its fertilizer inventory. The Regina-based company, created after the merger of Saskatchewan Wheat Pool and Agricore United, earned $288.3 million for the 12 months ended Oct. 31 and had sales of nearly $6.8 billion.
BAYSTREET
All but one of the 13 TSX sub-groups were pointed upwards, led by financials, ahead 4.4%, energy, up 4.3% and information technology, which surged 4.2%. The lone laggard was real estate, only 0.2% off.
The TSX Venture Exchange lost 5.13 to 851.55, while the NASDAQ Canada index galloped 24.84 points to 523.75
ON WALLSTREET
New York's Dow Jones industrials sprouted wings and flew Wednesday, putting on 279.01 to 8,228.10 after tumbling 332 points Tuesday. The S&P 500 advanced 35.03 points to 840.25, while the NASDAQ added 66.21 to 1,507.07.
Banks were among the main celebrants at Wednesday’s party. Citigroup, the U.S. bank that received a government-backed capital injection of $20 billion in November, surged 15% just before the close after closing at a 17-year low yesterday. The shares rose even as Citigroup lowered its quarterly dividend to a penny a share from 16 cents a share to comply with the terms of the bailout.
Bank of America, the biggest U.S. lender by assets, rose 63 cents, rebounding from its lowest close in 18 years. JPMorgan Chase & Co. advanced 14% .
IBM added about 10% to its price, after posting fourth-quarter profit of $4.43 billion, or $3.28 a share, surpassing analysts’ estimates, as the top provider of computer services coped with a worldwide technology slump by cutting overhead costs and adding products.
General Electric Co. slid as much as 8.1%, before paring losses and trading down 1.4%. The world’s biggest maker of power-plant turbines was given a “short-term sell” recommendation by UBS AG, which said reserves are too low and 2009 credit losses will exceed forecast.
United Technologies Corp., the maker of Pratt & Whitney jet engines and Otis elevators, fell 1.6% after saying conditions in the first half of 2009 will be worse than anticipated
Wal-Mart Stores Inc. declined 4% and was the biggest drag on the Dow average. The world’s largest retailer and the fifth-best performing stock in the S&P 500 last year was cut to ''neutral'' from ''outperform'' at Credit Suisse Group AG, which said ''waning inflation and slowing square footage growth should pressure sales growth.''
Allegheny Technologies Inc. had fallen 11% shortly before the bell. The specialty-metals producer that supplies titanium to Boeing Co. said fourth-quarter profit declined 26% because of an “unprecedented” fall in demand in several key markets.
U.S. Treasury prices tumbled, raising the yield on the benchmark 10-year note to 2.52% from 2.35% Tuesday. Treasury prices and yields move in opposite directions. Yields on the 2-year, 10-year and 30-year Treasurys all hit record lows last month.
U.S. light crude oil for March delivery rose $2.71 to settle at $43.55 a barrel on the New York Mercantile Exchange.
COMEX gold for February delivery fell $5.10 to $850.10 an ounce.
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