Bay Street stocks have surged again on Monday, boosted by gains in commodity prices and a strong day for U.S. stocks. The market appeared headed toward a five-week closing high.
The S&P/TSX Composite Index jumped 162.23 points to 10,531.65 points, following last week’s combined 600-point hike over five sessions. Today runs the winning streak to six.
Mining stocks had a very successful day. First Quantum rallied 9.6% to $68.59, Teck Resources gained 3.8% to $24.32 and HudBay was up 4.7% to $8.05.
Materials and gold stocks were also up substantially, as Agnico-Eagles gained 3% to $63.80, Eldorado was up 2.5% at $10.54 and Goldcorp added 2.3% to end the day at $42.00.
In corporate news, Canadian Hydro Developers surged nearly 35.3% to $4.94 as TransAlta announced that it intends to make an all-cash offer to acquire the Calgary-based company at a price of $4.55 per share. The proposed transaction has an enterprise value of approximately $1.5 billion. TransAlta stock was down 1% to $20.80.
Labopharm plunged 12.2% to $2.09 after the company's new anti-depressant drug was not approved by the FDA because of problems at a supplier's factory, according to The Canadian Press.
National Fuel Gas announced that it has purchased Ivanhoe Energy's oil and gas operations for about $40 million U.S. Ivanhoe shares were up 2.7% to $1.53.
Hillsborough Resources Limited soared 41.3% to 44.5 cents after the coal mining company announced it has entered into a revised agreement with Vitol Group whereby Vitol would pay $3.03 million U.S. in cash, including net debt.
In economic news, Stats Canada said wholesale sales in current dollars fell 0.3% to $40.1 billion in May, following a revised drop of 0.7% in April. In volume terms, wholesale sales were unchanged in May. Economists were looking for a drop of 2.5% from a month earlier.
Meanwhile, foreign acquisitions of Canadian securities reached a five-year high of $18.9 billion in the month, more than double the revised $9.05 billion from the previous month, fueled by new issues of Canadian corporate bonds.
The Canadian dollar remained ahead 0.77 cents to 90.37 cents U.S.
ON BAYSTREET
All but one of the 14 TSX subgroups ended Monday in positive territory. Metals and mining stocks led the charge wire to wire, surging 4.8%, followed by global base metals, up 3% and gold stocks, ahead 2.5%.
Only a slight 0.2% drop for telecoms prevented unanimity.
The TSX Venture Exchange was 22.47 points to the good, at 1,118.09, while the Nasdaq Canada Index moved 22.56 points higher to 729.98
ON WALLSTREET
In New York, a rally picked up steam Monday in the final hour of the session as investors were optimistic about second-quarter quarterly reports.
Stocks also got a charge from reports that small business lender CIT has secured private-sector financing to keep it out of bankruptcy. Investors were encouraged to see that the financial sector can take care of itself, without government bailout funds.
The Dow Jones Industrials average vaulted 104.21 points to close at 8,848.15. The S&P 500 index added 10.74 points to 951.12. The tech-rich Nasdaq composite index also finished ahead, 22.68 points, to 1,909.29.
The major force on Wall Street is second-quarter earnings. Companies have beat analysts' estimates by more than in other quarters, according to some experts, and that sentiment is supporting stocks Monday.
Wall Street is using the second-quarter financial reports to set expectations for the pace of the economic recovery.
A report from Goldman Sachs released Monday increased its 2009 target for the S&P 500 index to 1060 from 940, a 13% jump in the index.
This week, 145 of the S&P 500 companies, or 23% of the broad index, are due to report quarterly results. Among them, 12 Dow components, including American Express, Microsoft, Coca-Cola and Merck, are set to release results.
Last week, a slew of major tech and finance companies reported either better-than-expected earnings or offered positive guidance: Intel, IBM, JPMorgan Chase, Goldman Sachs and Citigroup.
Texas Instruments reports results after the close. The chipmaker is expected to have earned 18 cents U.S. per share versus 44 cents U.S. a year ago, according to a consensus of analysts surveyed by Thomson Reuters.
The board of CIT has approved a deal for a $3-billion U.S. loan from bondholders in order to stave off a bankruptcy filing, according to published reports. The deal was expected to be announced before the day was out.
The small and midsize business lender has been scrambling to raise money after the government said it would not provide it additional bailout funds. CIT received $2.3 billion U.S. in aid from the government late last year.
CIT shares had lost more than 80% since the beginning of June. On Monday, shares surged about 80% to trade at $1.27 per share.
Economically speaking, the index of leading economic indicators (LEI) rose 0.7% in June, according a report from the Conference Board. Economists polled by Briefing.com were expecting the index to have risen by 0.5% in June, according to a consensus estimate. LEI rose 1.2% in the previous month.
Treasury prices gained to end the day, lowering the yield on the benchmark 10-year note to 3.61%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil hiked 42 cents to $64.33 U.S.
Gold prices leaped $11 to $949 U.S. an ounce.
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