The Toronto stock market was higher Wednesday as commodity stocks advanced in the wake of positive American news from the banking and retail sectors and dealmaking in the Alberta oilpatch.
The S&P TSX Composite Index ended the day ahead 197.10 points, or 1.8%, to 11,397.27
French energy giant Total SA is acquiring a bigger stake in Alberta’s oilsands industry through the purchase of UTS Energy Corp. in a deal worth more than $1.5 billion. A subsidiary of Total will pay $3.08 per share cash.
Besides the cash, shareholders of UTS would receive stock in SilverBirch Energy Corp. — a new publicly traded company being set up as part of the deal. UTS, along with Teck Resources, own 40% of the Fort Hills oilsands project. Suncor Energy) owns the other 60%. UTS shares soared $1.33 or 63% to $3.44, Teck shares gained $1.97 to $33.65 while Suncor climbed $1.27 to $32.50.
Canadian Natural Resources was up $1.01 to $35.82 and EnCana Corp. rose 82 cents to $33.16.
Oil investors were mulling crude inventory levels announced by the American Petroleum Institute later Wednesday and the Energy Department’s Energy Information Administration on Thursday.
Analysts expect crude supplies to fall 3.5 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos, while inventories of gasoline and distillates will likely rise.
The base metals sector was ahead as copper prices also advanced with the September contract on the Nymex up five cents at $3.03 U.S. HudBay Minerals was up 80 cents to $11.70 while Quadra FNX Mining was up 73 cents to $10.27.
Rail stocks also advanced with Canadian Pacific Railway ahead $1.54 to $57.81.
And investors were also pleased with a report that second quarter profit forecasts at American bank State Street Corp. topped analysts’ expectations. In New York, its shares moved ahead $2.95 to $36.29 U.S.
The TSX financial sector was mixed on the State Street report, with Bank of Montreal ahead 71 cents to $59.26 and Royal Bank rose nine cents to $52.46.
The gold sector turned positive as prices for the precious metal switched direction to move higher. Goldcorp Inc. was ahead 50 cents to $43.35.
In other corporate news, Rio Tinto said Aluminum Corp. of China is interested in buying a minority equity stake in Ivanhoe Mines Ltd., or a direct interest in the companies’ Oyu Tolgoi copper and gold mineral development in Mongolia. Rio Tinto, the world’s third-biggest mining company, owns 29.6% of Ivanhoe. Ivanhoe shares gained 68 cents to $14.55.
Shares in Lyrtech Inc, a worldwide leader in digital signal processing technologies, surged nine cents or 112.5% to 17 cents. The company has won a two-year contract worth $28 million U.S. to develop an intelligent motion detection module for use in exterior, commercial LED lighting systems.
Shares in New Gold Inc. fell 69 cents to $5.39 after the intermediate gold producer disclosed that a Mexican court has denied its appeal of a regulatory ruling cancelling the environmental impact statement for its Cerro San Pedro Mine.
The Canadian dollar tacked on 0.66 cents at 95.44 cents U.S.
ON BAYSTREET
All 14 TSX subgroups were positive, metals and mining most so, jumping 6.1%, global base metals raced ahead 4.2% and energy stocks were 2.8% more energetic!
The TSX Venture Exchange strode forward by 13.96 points to 1,361.84 while the Nasdaq Canada index was up 18.26 points to 593.35.
ON WALLSTREET
In New York, stocks surged Wednesday, with the Dow jumping as much as 283 points, as investors came back after the recent bloodletting, spurred on by State Street's improved earnings forecast.
The Dow Jones industrial average soared 274.66 points, or 2.8%, to 10,018.28, its biggest one-day point and percentage gain since June 10.
The S&P 500 index leaped 32.21 points, or 3.1%, to 1,060.27, for its biggest one-day point and percentage gain since May 27.
The Nasdaq composite index moved 65.59 points, or 3.1%, higher to 2,159.47, its biggest one-day point and percentage gain since May 10.
A stronger euro helped propel commodity shares, cooling some worries about the European debt crisis.
State Street gained 9%. The KBW Bank index, which includes State Street, gained 3.5%.
Stocks were also bouncing in the aftermath of a sell-off that sent the major indexes all down by more than 15% since the late April highs. The indexes lost 5% last week alone and closed at eight-month lows.
Worries about the U.S. economy heading toward a double-dip recession, particularly amid the fallout in Europe, were key to the decline that was stemmed Tuesday.
Whether the bounce becomes a bigger rally will depend on whether the S&P 500 can close above and hang on to some key technical levels it is flirting with, he said.
The market's ability to move higher will also depend on the results of the European bank "stress tests" as well as what kind of profit guidance U.S. companies give as they begin reporting quarterly results in the next few weeks.
State Street said it will report operating earnings of 92 cents U.S. per share on revenue of $2.2 billion U.S. versus forecasts for a profit of 74 cents U.S. per share on revenue of $2.2 billion U.S., according to Thomson Reuters.
The regional bank also said it was taking a one-time after-tax charge of 50 cents U.S. per share to provide cash for trust funds that are run by its money-management unit, State Street Global Advisors.
On the downside, Family Dollar Stores forecast fiscal fourth-quarter earnings in a range that was short of analysts' estimates, due to the mixed economic outlook and the impact of competitor Wal-Mart Stores.
Among other stock movers, truckers and railroads surged, lifting the Dow Jones transportation average by 2.5%.
Gains were broad based, with all 30 Dow components rallying. In addition to financial components such as JPMorgan Chase, other big Dow gainers included Boeing, Caterpillar, Chevron, Hewlett-Packard, IBM and 3M.
In minor economic news, the number of Americans behind on their credit-card payments fell to an eight-year low in the first quarter, the American Bankers Association reported Wednesday.
A sustained period of high unemployment and worries about the recovery have caused investors to spend less and banks to lend less.
Treasury prices were lower, raising yields on the 10-year note to 2.98% from Tuesday’s 2.93%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil moved higher by $2.50 to $74.48 U.S.
Gold prices strengthened five dollars to $1,203 U.S. an ounce.
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