The Toronto stock market was sharply higher mid-afternoon Tuesday, clawing back a large chunk of a slide Monday triggered by worries about doubtful consumer strength in a U.S. economic recovery.
The S&P/TSX Composite Index approached the closing bell ahead 133.79 points, or 1.3% to 10,665.38, after Monday’s 300-point-plus unloading.
Investors are aware that without the support of the U.S. consumer, which accounts for around 70% of the U.S. economy and 20% of the global economy, recovery will be muted at best.
Most TSX sectors advanced Tuesday afternoon but analysts say investors should get used to choppy conditions amid a weak recovery.
The base metals sector gained, as the September copper contract slipped 0.85 of a cent to $2.7615 U.S. a pound. First Quantum gained $4.11 to $69.58 and Teck Resources gained 25 cents to $28.17.
The TSX energy sector prospered as EnCana Corp. improved $1.48 to $56.52 and Husky Energy Inc. was 98 cents higher to $31.56.
The TSX gold sector improved as Barrick Gold Corp. rose 62 cents to $36.89.
The financial sector climbed with National Bank ahead $1.04 to $57.36.
Another major driver on the TSX was Research in Motion Ltd. Its shares rose $3.44 to $81.54 as an RBC Capital Markets predicted wider use of smart phones in the coming years.
Also, shares in Rogers Communications were down two cents at $30.12 after the company said it has placed more orders for Apple's new iPhone 3GS. The phone is out of stock at a majority of Rogers and Fido retail stores across the country and online after being launched in June.
Rogers is the exclusive carrier of the iPhone in Canada and it has the only network at this time capable of running the touchscreen smartphone.
In other corporate news, New Flyer Industries Inc. said Monday it is cutting up to 320 jobs or about 13% of its workforce after a major customer deferred an order of buses. Its units fell 66 cents to $7.52.
The announcement of the cuts came as the company reported a quarterly loss of $14.7 million compared with a loss of $10.7 million.
Oil and natural gas company Cequence Energy dropped two cents to $1.15 after the company said that it agreed to buy certain oil and gas producing properties from one of the major publicly traded oil and natural gas company as well as from a private concern. The deal price is valued at about $19 million in cash.
Gran Tierra Energy added 11 cents to $4.16 after the company said it had resumed regular production operations in the Putumayo Basin of Southern Colombia.
WebTech Wireless climbed two cents to $1.22 after the company said it has received an order for 500 model WT5000 Locators from Bridge Security for their customer Vodafone Ghana.
The Canadian dollar gained 0.44 cents, at 90.77 cents U.S.
ON BAYSTREET
All but one of the 14 TSX subgroups were positive on the day. Real-estate stocks jumped 2.5%, metals and mining stocks were ahead 2.3%, followed by information technology, up 2.2%.
Only health-care stocks were off, dropping 0.4%.
The TSX Venture Exchange gained 6.68 points, to 1,166.50, while the Nasdaq Canada Index tacked on 25.91 points to 730.04
ON WALLSTREET
In New York, stocks rallied Tuesday after Home Depot's results and forecast and a few bright spots in the day's housing market report gave investors a reason to dip back into the market after a two-session retreat.
The Dow Jones Industrials gained 82.60 points to 9,217.94. The S&P 500 index was up 9.94 points to 989.67. The Nasdaq composite index moved higher by 25.08 points to 1,955.92.
After the close, Hewlett-Packard reported quarterly sales and earnings that topped estimates.
Stocks slipped for two straight sessions, with the major gauges each losing over 3% on worries that a struggling consumer could pressure an already fragile recovery.
But Tuesday brought some better news from the retail sector and investors used it as an opportunity to move back into the market, albeit on light trading volume.
A weaker-than-expected consumer sentiment report Friday and Lowe's disappointing profit report Monday sparked the selling, which followed a roughly five-month advance.
But Tuesday brought better profit news from Dow component Home Depot and discount retailer Target, helping to mitigate some consumer worries. On the downside, the morning's housing market report missed growth forecasts but investors sought out some good news when it came to single-home construction.
The S&P 500 is roughly 45% higher since bottoming March 9. Year-to-date, it's just up 8.5% as of Monday's close.
Home Depot reported earnings of 66 cents U.S. per share, versus 77 cents U.S. a year ago, as the recession cut into its business. But results were better than expected and the home improvement retailer boosted its full-year earnings outlook. Shares of the Dow component gained 4% Tuesday.
Target reported earnings of 79 cents U.S. per share versus 82 cents U.S. a year earlier, topping expectations, due to cost cutting and reduced inventories. But revenue and same-store sales slipped, as consumers remained cautious. Shares gained 6%.
General Motors is boosting production in the second half of the year and bringing 1,350 of its North American employees back to work as a result of increased demand from the government's "Cash for Clunkers" program.
Separately, GM said it made a deal to sell its money-losing Saab to Swedish luxury sports car maker Koenigsegg.
Elsewhere, Huron Consulting Group rallied 34% in unusually active Nasdaq trading after the business consultant reported higher quarterly revenue and earnings that topped estimates.
American Axle & Manufacturing Holdings rallied more than 94% in unusually active New York Stock Exchange trading after saying it will get up to $210 million U.S. in help from former parent GM. The auto parts manufacturer is trying to restructure its debt outside of bankruptcy court.
Housing starts and building permits both slipped in July, according to a Commerce Department report released Tuesday. The report surprised Wall Street economists who were looking for an improvement.
Housing starts fell to a 581,000 annualized rate in July from a revised 587,000 in June. Economists thought starts would rise to 599,000, according to a Briefing.com survey.
Building permits, which indicate builder confidence, fell to a 560,000 annualized rate in July from a revised 570,000 annualized rate in June. Economists thought it would rise to a 576,000 annualized rate.
A separate report showed that inflation at the wholesale level remains in check. The Producer Price Index fell 0.9% in July after rising 1.8% in June. Economists thought it would fall to 0.3%. The core PPI, which strips out volatile food and energy prices, fell 0.1% in July versus forecasts for a rise of 0.1%.
Treasury prices inched downward, boosting the yields on the 10-year note to 3.52%, from Monday’s 3.46%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil strengthened $2.44 to $69.35 U.S.
Gold prices picked up $3 to $939 U.S. an ounce.
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