Traders in Canada’s biggest stock centre clung to a small gain Monday afternoon as strong economic data from China and the passage of new global banking regulations boosted the base metals and financial sectors, but gold stocks proved a weight.
The S&P TSX Composite Index remained 52.77 points higher to close Monday at 12,149.86.
Toronto’s financial sector was up, as shares in Royal Bank of Canada added $1.10 to $54.60.
The base metals sector jumped as fresh signs of strong economic expansion in China raised demand prospects for everything from copper to aluminum.
China’s industrial output, fixed asset investment and retail sales all showed higher-than-expected growth in August, according to government data released on the weekend. Buying sentiment was also rekindled because the central bank didn’t raise interest rates even after inflation hit its highest level in a year last month.
The December copper contract on the New York Mercantile Exchange gained 7.25 cents to $3.48 U.S. a pound. Shares in HudBay Minerals Inc. gained 78 cents or 5.2% to $15.74.
Oil prices hiked after the closure of a Chicago-area pipeline following a leak continued to raise supply concerns.
The operator of the pipeline, Enbridge Inc. subsidiary Enbridge Energy Partners, said almost all of the spilt crude has been cleaned up but the pipeline remains shut down. The mishap followed a leak in an Enbridge pipeline in Michigan earlier this summer. Shares in Enbridge lost 78 cents to $51.72.
The gold sector weighed on the TSX at mid-afternoon, as shares in Goldcorp Inc. lost 36 cents to $42.50.
In Canadian corporate news, energy company Athabasca Oil Sands Corp. has signed a deal to acquire Excelsior Energy Ltd. for approximately $144 million. Athabasca’s shares gained 55 cents or 5.5% to $10.50. Excelsior shares added a penny to 37 cents.
Magna International Inc. said co-CEO Siegfried Wolf will leave the auto parts giant in November to join the parent company of Russian automaker Gaz Group. Magna’s shares fell 91 cents to $80.94.
Shares in Sears Canada Inc. gained 18 cents to $21.60 after the company announced late Friday that it will pay a special dividend of nearly $377 million to shareholders -- money that will mostly wind up in the pockets of Illinois-based majority owner Sears Holdings Corp.
And global mining giant Rio Tinto said it has increased its ownership in Ivanhoe Mines to 34.9% after the conversion of a credit facility into shares. Shares in Ivanhoe added 63 cents or 3.4% to $19.28.
The Canadian dollar strengthened 0.66 cents to 97.27 cents U.S.
ON BAYSTREET
Nine of the 14 TSX subgroups closed the session higher. Metals and mining rocketed ahead 4.5%, the global base metals group powering up 3.1% and financials moving 1.3% to the good.
Gold weighed most on the five groups that fell short, losing 1%, while information technology stocks shaved off 0.5% and consumer staples gave back 0.3%.
The TSX Venture Exchange was up 9.07 points, at 1,605.57, while the Nasdaq Canada index was higher 3.73 points to 575.48.
ON WALLSTREET
In New York, issues finished higher Monday as new global banking rules, upbeat economic data from China and some acquisition activity helped boost investor sentiment.
The Dow Jones industrial average grew 81.36 points ahead to close at 10,544.13.
The S&P 500 index prospered 12.35 points to 1,121.90. The tech-rich Nasdaq composite index moved forward 43.23 points to 2,285.71.
Markets around the world gained on news of the global banking agreement. The historic new reform will force financial institutions to more than double their capital reserves as a cushion protecting against future meltdowns.
Stocks posted modest gains in a light trading session Friday, as ongoing worries about the economy dampened enthusiasm over an increase in wholesale inventories.
Several economic reports are on tap for the week, and investors are also likely to focus on tax policy as lawmakers return from recess. Congress is expected to work on possible legislation to extend the Bush tax cuts.
The bank reform came after top central bankers met in Basel, Switzerland, over the weekend. The new rules would require financial institutions to increase their core capital cushions to at least 4.5% of assets, up from the current 2%.
Banks will have until 2019 before the rules come into full force -- a longer timeline than some had predicted.
But that relief will likely be short-lived, said Steven Goldman, market strategist at Weeden & Co.
Bank stocks rallied, and the KBW Bank Index soared 3% in late trade.
Shares of JPMorgan Chase, Bank of America and SunTrust also surged about 3%. Shares of Marshall and Ilsley, based in Milwaukee, leapt 4.6%.
Hewlett-Packard announced it has agreed to acquire cyber-security firm ArcSight for $1.5 billion U.S., or $43.50 U.S. per share -- a 24% premium over the stock's Friday closing price.
Shares of ArcSight surged more than 25% in late trade.
Rental car company Hertz Global Holdings said Monday that it had raised its offer for Dollar Thrifty Automotive to $50 U.S. per share, or $1.56 billion U.S. Dollar Thrifty shares rose 5.2% in late trading, while Hertz was up 6.9%.
In April, Hertz originally offered to pay $1.2 billion U.S. to acquire its rival, but competing car rental company Avis later offered $1.36 billion U.S. for the company.
Genzyme said it will sell its genetic testing unit to Laboratory Corp. of America Holdings for $925 million U.S. Last month, Sanofi-Aventis went public with an $18.5-billion U.S. cash offer for Genzyme, with the French firm hinting it may consider a hostile takeover if Genzyme refuses to talk.
Genzyme shares fell 0.7%, while Laboratory Corp was down 4.6%.
Xerox shares rose more than 7% after a favorable article in Barron's said chief executive Ursula Burns is rebranding the copier giant as a data-services provider.
Economically speaking, in a Saturday report, China reported stronger-than-expected growth in its industrial sector in August. Inflation in the country also accelerated last month, driven by rising food prices.
The data spurred China's central bank on Monday to set the yuan's daily reference rate at its highest level against the dollar since it scrapped its peg against the greenback in 2005.
The Treasury Department released August budget numbers, which showed a $90.5-billion U.S. deficit in the month, following a shortfall of $103.6 billion U.S. in July.
Treasury prices moved upward, decreasing the yield on the benchmark 10-year Treasury note to 2.74% from 2.80% Friday. Treasury prices and yields move in opposite directions.
The price of a barrel of oil gained 66 cents to $77.11 U.S.
Gold prices were flat at $1,247 U.S. an ounce.
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