Canadian stocks came off the highs of the day but remain notably higher on Tuesday afternoon. Sharp strength in the gold sector drove the surge.
Soon before the closing bell, the S&P TSX Composite index had grown 152.99 points, or 1.4%, to 11,255.61.
Gold stocks and materials stocks both added strength after the precious metal posted a record close of $1,039.70 per ounce. Eldorado surged 9.4% at $12.74, Royal Gold gained 5.5% to $50.70, Agnico-Eagle Mines was up 4.8% to $74.66 and Goldcorp gained 4.2% to $43.97.
Mining stocks were up, following copper prices higher. Teck Resources picked up 3.4% to $29.77 and First Quantum prospered 2.3% to $68.15.
Energy stocks were up as crude oil finished in the green on the NYMEX. Canadian Oil Sands added 3.5% to $30.18, Suncor was up 2.5% to $36.38 and Encana climbed 1.5% to $61.34.
Pengrowth Energy Trust moved higher by 0.9% to $10.81 after the company announced that it had entered into an agreement to acquire more than 28,000 acres of undeveloped land in the Horn River Basin for $9 million.
In corporate news, Canwest Global Communications was flat at 23.5 cents after announcing its National Post and CanWest Television units will file for bankruptcy.
BCE inched up 0.2% to $26.34 after the company said that it reached an agreement with Apple Inc. to bring iPhone 3G and iPhone 3GS to Canada this November.
TerraVest Income Fund was up 4.6% to $2.04 as the company announced the appointment of John Maynard as President and Chief Executive Officer of the Administrator of the Fund, TerraVest Industries.
Talisman Energy gained 5.4% to $19.28 after an appeals court confirmed the dismissal of a suit against the company.
On the economic front, Canadian building permits rose 7.2% in the month of August. An increase of 5% was expected, compared to a revised drop of 10% in July.
Elsewhere, Canada's Ivey Purchasing Managers Index rose more than expected in September, pushing the loonie to a yearly high on its way to parity with the U.S. dollar.
According to data released Tuesday, the Ivey PMI Index came in at 61.7 in September, stronger than the expected 58 and higher than 55.7 the previous month.
The data measures the monthly change in purchases by corporate executives and is widely considered a gauge of optimism.
A headline value above 50 indicates an increase in purchases from the previous month and a value below 50 indicates a decrease.
Accordingly, the Canadian dollar picked up 0.92 cents to 94.35 cents U.S.
ON BAYSTREET
All but one of the 14 TSX subgroups remained positive. Gold spiked 5% higher, while materials gained 4.1% and utilities were 2.1% to the good.
Only a 0.6% slide by telecoms kept things from being unanimous.
The TSX Venture Exchange jumped 26.47 points, or 2.1%, to 1,280.72, while the Nasdaq Canada index was up 11.61 points, or 1.7%, to 701.57.
ON WALLSTREET
In New York, stocks advanced Tuesday, gaining for a second session as a weaker dollar boosted commodities and dollar-sensitive stocks, fostering a broad-based rally.
The Dow Jones Industrials marched ahead 131.50 points, or 1.4%, to close at 9,731.25. The S&P 500 index improved 14.26 points to 1,054.72. The Nasdaq composite index rocketed 35.42 points, or 1.7%, to 2,103.37.
The runup had been stronger through midday, but lost some steam as the dollar cut losses and financial shares turned mixed to negative.
The stock advance was broad based, with 29 of 30 Dow stocks rising as investors piled into a variety of stocks battered in a two-week selloff. Worries that the rally had gotten ahead of the recovery caused the selloff at the end of the third quarter and start of the fourth.
But that decline of just over 4% on the S&P 500 seemed to give investors the entry point they were looking for to jump back into stocks.
Stocks also welcomed reports that Australia became the first major economy to lift interest rates since the start of the financial crisis.
The falling dollar also boosted gold to an all-time high of $1,045 during the session and $1,039.70 at the close. The weak U.S. currency was also good for the stocks of multi-national companies that benefit from a weaker dollar.
A weaker-than-expected response to a government debt auction also dulled some of the shine on the rally.
An upbeat reading on the services sector of the economy helped spark the advance Monday, but there was little on the docket until Wednesday when readings on consumer credit and the Treasury budget were due.
A roughly seven-month-long rally in U.S. stocks petered out late September at the end of an otherwise upbeat third quarter. In the July-September period, the Dow and S&P 500 both rallied 15%, the best quarter in a decade, while the Nasdaq rose 15.7%, its best quarter in six years.
But the selloff was modest amid the broader rally that's been in place since last March. Since bottoming at a 12-year low March 9, the S&P 500 has gained 51.2%, and the Dow has gained 45% as of Monday's close. After hitting a six-year low, the Nasdaq has gained nearly 61%.
The broad advance benefited a number of stocks and sectors.
Materials and commodities stocks surged, including Dow components Alcoa, DuPont, Chevron and Exxon Mobil.
The Dow's other biggest gainers were Caterpillar, Hewlett-Packard, IBM, JPMorgan Chase and United Technologies.
The third-quarter earnings reporting period unofficially kicks off Wednesday with Alcoa, as is typical. The aluminum maker is expected to post a loss versus a profit a year ago, demonstrating the weak quarter expected for the materials sector.
S&P 500 profits are expected to have dropped almost 25% from the third quarter of 2008.
Boeing said it will take a $1-billion U.S. charge in the third quarter because of higher costs to produce its 747-8 airplanes, and the rough market conditions. The stock was little changed and was the only Dow stock not to advance.
Treasury prices dipped, raising the yield on the benchmark 10-year note to 3.26% from Monday’s 3.21%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil gained 47 cents to $71.02 U.S.
Gold prices hit a new high, surging $22 to $1,040 U.S. an ounce.
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