The Toronto stock market ran ahead sharply this afternoon in an advance across most sectors and led by energy stocks as oil prices advanced and the Bank of Canada suggested economic growth could be stronger than it predicted in July.
The S&P TSX Composite index surged ahead 147.11 points, or 1.3%, to 11,147.28, a new high for 2009.
The TSX energy sector was as the October crude contract on the New York Mercantile Exchange moved up in price, after data showed a drawdown of American inventories totaling 5.9 million barrels last week, more than three times estimates of analysts surveyed by Platt's, the energy information arm of McGraw-Hill Cos.
EnCana Corp. rose $1.47 to $59.31 and Suncor Inc. gained $1.40 to $36.17. Also, the Organization of Petroleum Exporting Countries confirmed early today at its meeting in Vienna that it would keep crude output unchanged.
And the International Energy Agency said the slump in global oil demand in 2009 would be less severe than previously forecast and predicted consumption would rise in 2010 as the world economy stabilizes.
Magna International Inc. was ahead eight cents to $47.42 after the board of General Motors Corp. announced today it will recommend that the automaker's Opel unit be sold to a consortium of the Canadian auto parts giant and Russia's Sberbank. The board rejected a bid from Belgian investment house RHJ International.
The December gold contract on the New York Mercantile Exchange continued to back away from the $1,000-U.S. mark, but the TSX gold sector rose. Barrick Gold Corp. gained $1.20 to $40.91 and Goldcorp Inc. was ahead $1.34 to $43.95.
The base metals sector moved up as the December copper contract backed off 4.75 cents to $2.8765 U.S. a pound. Teck Resources advanced 59 cents to $28.61.
The financial sector also helped maintain gains, as Scotiabank was up $1.11 to $44.98.
Shares in Yogawear retailer Lululemon Athletica Inc. rose nine cents to $23.48 after it reported that revenue in the summer quarter rose 14% from a year ago to $97.7 million U.S. However, Lululemon's net income fell to $9.2 million, down from $11.1 million a year ago.
On the economic front, Stats Canada reported imports were up 8.3% to $31.7 billion in July while exports grew 3.3% to $30.3 billion. As a result, Canada registered a trade deficit of $1.4 billion in July compared with a trade surplus of $37 million in June. Economists expected a much more modest deficit.
The Canadian dollar was up 0.18 cents, to 92.74 cents U.S., following the Bank of Canada's forecast, which came as it also announced it was leaving its key interest rate at 0.25%.
In July, the bank had projected the economy would rebound by 1.3% in the current quarter and another 3% in the final three months of the year. The central bank said economic performance could be even better because of stimulative monetary and fiscal policies, improved financial conditions, firmer commodity prices and a rebound in business and consumer confidence which is supporting domestic demand growth in Canada.
The Bank of Canada added that persistent strength in the Canadian dollar remains a risk to growth.
ON BAYSTREET
All but one of the 14 TSX subgroups ended the day in positive territory.
Gold shone brightest, ahead 3.1%, followed by energy and materials stocks, gaining 2.3% each. Only information technology’s 0.4% slide kept things from being unanimous.
The TSX Venture Exchange surged 12.55 points to 1,248.20, while the Nasdaq Canada index picked up 9.59 points to 789.31.
ON WALLSTREET
In New York, the stock rally accelerated Thursday afternoon after a stronger-than-expected response to a debt auction and some upbeat comments from the Treasury Secretary brought out the buyers.
The Dow Jones Industrials picked up 80.26 points at noon to 9,561.96. The S&P 500 index gained 10.07 points to 1,035.39. The Nasdaq composite index up 23.63 points, to 2,084.02.
All three major indexes have risen for five consecutive sessions, and all have now scraped highs for 2009. While the gains have pushed the S&P 500, Nasdaq and Dow to fresh highs, the size of the gains over the last week has been modest, suggesting investors are taking baby steps.
After an initial pullback Thursday morning, stocks moved higher, with energy, technology and consumer names leading the way. Rising oil prices boosted energy shares, including Dow components Chevron and Exxon Mobil.
Dow component Procter & Gamble said that it expects sales to improve in the next quarter, sending shares 4% higher.
The maker of Tide, Crest and other consumer products said sales in the fiscal second quarter should rise 1% to 4%. Current-quarter sales are expected to be flat to down 3%. Also, in the current quarter, P&G said it still expects earnings per share of 95 cents to $1 U.S. Analysts are expecting a profit of 97 cents U.S. per share.
Chip maker Texas Instruments said it expects to report a bigger profit in the third quarter than it previously forecast. TI said it will earn between 37 and 41 cents U.S. per share versus its earlier forecast of 29 to 39 cents U.S. per share. The company expects sales in a range of $2.73 billion to $2.87 billion U.S., versus its earlier forecast of $2.5 billion to $2.8 billion U.S.
Shares gained 1%.
Monsanto said it expects to see 2010 earnings in a range that is well below analysts' estimates, due in part to an excess of herbicide supply. The world's leading seed maker said it expects fiscal 2010 earnings per share of $3.10 to $3.30 U.S.. Analysts currently expect earnings of $4.10 U.S.
Shares fell 5%.
Stocks got an extra jolt after Treasury's auction of $12 billion U.S. in reopened 30-year bonds generated better-than-expected demand. The U.S. is relying on debt auctions to help offset the deficit.
Also helping was Treasury Secretary Timothy Geithner, speaking before the Congressional Oversight Panel, who said that the focus is shifting from rescuing the economy to preparing for growth. He also said it isn't likely that more bank bailout money will be needed.
On the economic front, the Labor Department said initial jobless claims fell by a more-than-expected 26,000 in the week ended Sept. 5. The department reported that 550,000 Americans filed for their first week of unemployment benefits last week, down from the revised figure of 576,000 in the previous week.
Economists had expected 560,000 claims, according to Briefing.com consensus.
Continuing claims, a measure of those receiving benefits after the initial payment, declined to 6,080,000, from the 6,234,000 level reported last week.
The Commerce Department reported that the U.S. trade gap widened to a deficit of $31.96 billion U.S. in July. Economists were expecting it to have widened to $27.3 billion U.S. in July, according to Briefing.com consensus.
The government revised its trade balance figure for June to a deficit of nearly $27.5 billion U.S.
On the housing front, RealtyTrac said the number of homes repossessed from borrowers fell by 12.7% in August compared to July, while the number of Americans who were late on their mortgages was down just 0.5%.
The U.S. dollar resumed its slide against other major currencies, falling to a fresh seven-month low against the yen and a nearly 12-month low versus the euro.
Treasury prices moved sharply higher, lowering the yield on the benchmark 10-year note to 3.36% from Wednesday’s 3.47%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil was down 63 cents to $72.18 U.S.
Gold prices were unchanged at $997 U.S. an ounce.
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