The Toronto stock market moved higher Thursday as a commitment from the European Union to help Greece deal with its huge debt problem eased fears of a default.
The S&P/TSX Composite Index ended the day up 149.16 points, or 1.3%, to 11, 435.49.
The TSX financial sector shed most losses from early nervousness about Greece’s debt issue and was down slightly at mid-afternoon. However, shares in three of Canada’s big life insurance companies lost ground following disappointing earnings results.
Sun Life Financial shares fell $1.10 to $30.26 after it said on Thursday that quarterly profit more than doubled to $296 million or 52 cents a share in the last quarter of 2009. However, that’s less than the 65 cents a share that analysts expected.
Manulife Financial Corp. says it had a profit of $868 million in the fourth quarter, the equivalent of 51 cents per common share. That’s an improvement from a year-earlier loss of $1.87-billion, or $1.24 per share and its shares moved down 52 cents to $18.98.
And Great-West Lifeco Inc., the third of Canada’s three biggest insurance company’s to report Thursday, saw it shares gain a dime to $26.60 after the company reported profit of $443 million, or 47 cents per share, for the quarter ended Dec. 31. That’s down from $525 million, or 59 cents per share, in the same period of 2008.
Elsewhere in the sector, TD Bank rose 69 cents to $65.12.
The base metals sector surged forward as the March copper contract on the New York Mercantile Exchange was ahead 15 cents to $3.14 U.S. a pound. Teck Resources ran ahead $1.96 to $37.50 while HudBay Minerals rose $1.08 to $13.53.
The gold sector was up, as Barrick Gold Corp. gained 90 cents to $38.80.
The TSX energy sector was ahead, as Canadian Natural Resources climbed $1.19 to $70.29.
Canada’s largest natural gas producer, EnCana Corp. saw its fourth-quarter profit fall 41% as lower natural gas prices took a bite out of its top line. EnCana, which split off its oil division last year as Cenovus earned a fourth-quarter profit of $636 million, compared to $1.08 billion in the same period a year ago.
Stripping out the impact of the oil assets that were spun off into Cenovus, EnCana said operating earnings fell to 50 cents per share from 73 cents. Its shares moved 60 cents higher to $33.07.
Cenovus also handed in its first earnings report since being spun off from EnCana, showing that the company had net income of $24 million and operating earnings of $152 million in the fourth quarter. Its shares climbed 65 cents to $25.39.
The consumer discretionary sector declined as shares in Canadian Tire Corporation Ltd. fell $3.31 to $51.85 after it reported that its net income for the fourth quarter came in at $96.2 million, down from $101.5 million a year earlier.
Operating revenue in the 13 weeks ended Jan. 2 was $2.44 billion, down from $2.59 billion in a 14-week quarter ended a year earlier.
In other earnings news, Yellow Pages Income Fund said its net income in the fourth quarter rose 24% to $124.6 million or five cents a share. However the Montreal-based publisher of advertising directories added that its fourth-quarter revenue fell 4.7% compared with a year earlier to $405.7 million. Its units rose 21 cents to $5.39.
Sierra Wireless Inc. shares tumbled $2.47 or 19.8% to $10.00 after the company reported a loss of $2.7 million U.S. in its latest quarter, weighed down by restructuring costs and the costs of integrating its Wavecom acquisition. The results and the company’s earnings guidance missed analyst expectations.
Economically speaking, Statistics Canada reported this morning that the New Housing Price Index rose 0.4% in December, the same increase as reported in November.
The Canadian dollar progressed 1.15 cents to 95.20 cents U.S.
ON BAYSTREET
All but four of the 14 TSX subgroups were higher. Metals and mining stocks were the champion group, boosting themselves 4.8%, while materials jumped 3.4% and global base metals gained 2.9%.
The four laggards were weighed by consumer discretionaries, down 0.3%, while health-care and real-estate stocks lost 0.2% each.
The TSX Venture Exchange surged 15.89 points to 1,492.67, while the Nasdaq Canada index moved ahead 18.49 points to 740.41.
ON WALLSTREET
In New York, stocks rallied Thursday after the European Union's promise to help debt-ridden Greece eased worries that a default might hurt global markets.
The Dow Jones industrial average ballooned 105.81 points, or 1.1%, to 10,144.19. The S&P 500 index recovered 10.34 points to 1,078.47 and the Nasdaq composite regained 29.54 points to 2,177.41.
Stocks slid in the morning, but managed to turn up after the European leaders promised to help Greece, although details were scarce.
The announcement gave investors the impetus to push the Dow back above the 10,000 mark, which it has been straddling for the last week.
The easing of concerns that Greece and other debt-ridden nations might default enabled investors to take on more risk, including stocks and commodities. The dollar remained stronger versus the euro and weaker versus the yen.
Gains were broad based, with 28 of 30 Dow stocks advancing, led by Boeing, Caterpillar Chevron, Hewlett-Packard, IBM and 3M.
Investors have been cautious after a big selloff in January.
Between the rally high on Jan. 19 and the recent low hit last week, the S&P 500 fell 9.2%, getting close to the 10% decline that is the technical definition of a correction.
Stocks fell Wednesday on concerns about the Greek debt situation, the strong dollar and the Federal Reserve's plan to withdraw some of the trillions of dollars it has used to bolster the nation's financial system.
The Dow, S&P 500 and Nasdaq have all declined the past four weeks, as investors have overlooked improved quarterly profits and some positive signs in the economic reports.
Markets remain vulnerable to a pullback following last year's big rally, in which the S&P 500 gained 23%. Between bottoming at a 12-year low in March of 2009 and the end of the year, the S&P 500 gained 65%.
European leaders have reached a deal to help debt-ridden Greece avoid defaulting on its debt, although details were not expected to be finalized until Monday.
The intervention marks the first time the 16-nation bloc that shares the euro currency has had to bail out a member since the currency zone was created 11 years ago. The deal is expected to involve some form of loans.
Worries that a Greek default would spread to other debt-ridden European nations and destabilize the euro have dragged on global markets for weeks. Portugal, Italy, Ireland and Spain are also heavily debt-laden.
The concern had caused a flight from risk, with investors dumping the euro, U.S. stocks and commodities, and putting money into the dollar and government debt.
Boston Scientific reported a smaller quarterly loss versus a year earlier on higher quarterly sales. The medical device maker also announced a restructuring, including a cut of between 8% and 10% of its workforce. Shares fell 10% in unusually active New York Stock Exchange trading.
Power company FirstEnergy said it is buying Allegheny Energy, in an all-stock deal worth $4.7 billion U.S. Shares of Allegheny rallied 11.8% in active New York Stock Exchange trading.
On the economic front, the Labor Department reported that initial jobless claims dropped to 440,000 in the week ended Feb. 6, which was lower than expected and a decline from the prior week.
Jobless claims were expected to total 465,000 in the week ended Feb. 6, according to a consensus of economists' forecasts from Briefing.com. Claims totaled 483,000 the prior week, according to revised figures.
Treasury prices fell, raising the yield on the 10-year note to 3.72% from 3.64% late Wednesday. Treasury prices and yields move in opposite directions.
The price of a barrel of oil stepped ahead 63 cents to $75.15 U.S.
Gold prices added $19 to $1,095 U.S.
Related Stories
