The Toronto stock market registered a sharp gain Wednesday as investors moved back into commodity stocks following a string of losses caused by worries about the global economy.
The S&P TSX Composite Index jumped 208.70 points, or 1.8%, to close at 11,780.67, as bargain hunters waded into the market. That was after the TSX tumbled almost 200 points Tuesday with investors unnerved by data showing a slowdown in China’s manufacturing sector.
The energy sector gained ground as Suncor Energy Inc. gained $1.23 to $33.12 while Canadian Natural Resources rose $1.52 to $36.67.
The base metals sector was ahead while July copper in New York fell three cents to $3.03 U.S. a pound. Teck Resources climbed $2.16 to $36.03 while Quadra FXN Mining was ahead 31 cents to $13.57.
Financials also participated in the gains, as Scotiabank extended its advance even further in the session after a better-than-expected quarterly earnings report on Tuesday. The bank’s stock was up $1.18 to $50.70 while CIBC added $1.61 to $72.42.
Gold stocks were the weakest group, as Iamgold Corp. faded 29 cents to $17.90.
Stocks also got a boost as the euro held above the four-year low it hit on Tuesday.
The euro, which is used by 16 European countries, has heavily influenced trading over the past month. The currency has become an indicator of confidence in Europe’s ability to contain a sovereign debt crisis that began in Greece, but has spread to other countries, including Spain and Portugal. The euro traded at $1.2234 U.S. at mid-afternoon.
In corporate news, Brazilian steel producer Gerdau SA plans to buy out the stock in Gerdau Ameristeel Corp. it doesn’t already own in a bid that values the mini-mill steelmaker at about $4.77 billion U.S. Gerdau Ameristeel shares surged $3.89 or 51.2% to $11.50.
Shares in aircraft and rail manufacturer Bombardier Inc. ran ahead 22 cents to $4.83 as the company reported it had a $153-million U.S. profit in the first quarter. That came in at eight cents a share, a cent better than analysts had forecast.
Bombardier’s revenue dropped to $4.2 billion U.S. in the quarter, down $300 million from the year-earlier period but also slightly better than analyst estimates.
Shares in Alimentation Couche-Tard rose 51 cents to $19.75 after the convenience store operator said it is more confident than ever that Casey’s General Stores shareholders will accept its $1.9-billion U.S. offer to add the Iowa-based chain to its vast network.
The Quebec-based convenience store operator started its tender offer Wednesday, worth $36 U.S. per share in cash -- which is being opposed by Casey’s board of directors.
Women’s wear retailer Reitmans Canada Ltd. credits a stronger loonie as well as increased sales for a whopping 111.1% improvement in fiscal first-quarter profits to $16.5 million. The retailer also said it is increasing its dividend by two cents or just over 11% to 20 cents for an annual dividend of 80 cents. Its shares rose 36 cents to $18.62.
Goldcorp Inc. has agreed to sell the San Dimas gold-silver mine in Mexico to Mala Noche Resources Corp. in a cash-and-share deal valued at $500 million U.S. Goldcorp would end up owning about 30% of the junior mining company and its shares were up 65 cents to $45.75.
The Canadian dollar hiked 1.33 cents to 96.18 cents U.S.
ON BAYSTREET
All 14 TSX subgroups finished the day higher, with metals and mining flexing most of the muscle, gaining 4.1%, followed by global base metals, up 3.6% and energy stocks, ahead 3.2%.
The TSX Venture Exchange faded 4.08 points to 1,483.92, while the Nasdaq Canada index moved 25.07 points higher to 698.86.
ON WALLSTREET
In New York, stocks rallied Wednesday, led by a rebounding energy sector, as confidence returned after the previous session's huge selloff.
The Dow Jones industrial average climbed 225.52 points, or 2.3%, to close at 10,249.54.
The S&P 500 index added 27.67 points to 1,098.38. The Nasdaq composite index grew 58.74 points to 2,281.07.
On Tuesday, stocks ended sharply lower, with most of the decline coming in the final hour of trading as investors overlooked better-than-expected economic reports and instead worried about the global economic recovery.
Gains were broad-based on Wednesday, with energy stocks leading the way.
All of the Oil and Natural Gas Index's 24 components posted gains, while the Amex Oil Index added 2.7%, with all 12 of its components also rising.
Halliburton jumped nearly 12%, Schlumberger rose more than 8% and Andarko added more than 5%. BP rose nearly 3%.
On Tuesday, energy shares declined -- with BP plunging 15% -- after the company's latest attempt to plug the oil spill in the Gulf of Mexico failed and Attorney General Eric Holder said there would be a criminal investigation of the spill.
Technology shares also advanced Wednesday, with IBM and Intel gaining more than 2% and United Technologies rising more than 1%.
General Motors and Ford Motor both posted large increases in May sales of the brands they retain, with GM reporting a 32% gain in sales and Ford reporting a 23% increase. Toyota Motor's sales rose 7%.
Ford rose about 4% in afternoon trading, while Toyota slipped nearly 1%.
The Financial Crisis Inquiry Commission held the latest in a series of hearings on the role of ratings agencies in the market collapse of 2008-2009. Warren Buffett, the widely respected investor and chief executive of Berkshire Hathaway, was among the witnesses. Several representatives of ratings agency Moody's were also in attendance.
On the economic front, the National Association of Realtors said its pending home sales index, a measure of sales contracts for existing homes, rose 6% in April after climbing 5.3% in March.
The jump beat the 4.3% increase economists surveyed by Briefing.com had expected.
Elsewhere, outplacement firm Challenger, Gray and Christmas said employers announced plans to cut 38,810 jobs in May, a 1.3% rise from April's four-year low. However, job cuts were 65% lower than the same month in 2009.
Treasury prices faded, raising the yield on the 10-year note to 3.33% from Tuesday’s 3.30%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil gained 78 cents to $73.36 U.S.
Gold prices dropped two dollars to $1,225 U.S. an ounce
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