The Toronto stock market was sharply higher Tuesday, as a stronger-than-expected reading on American retail sales made traders feel more confident about the recovery prospects of the American economy.
The S&P/TSX Composite Index vaulted 150.10 points, or 1.2%, to end the day at 13,097.82.
The Canadian dollar spiked 0.79 cents to 103.23 cents U.S.
The TSX had lost more than 300 points over the previous two sessions, bringing the main index down just shy of 10% from its intraday high of 2011 which was registered on March 7.
Energy stocks were among the prime movers Tuesday, as Suncor Energy climbed 70 cents to $38.29 while Canadian Natural Resources improved by 77 cents to $39.38.
Metal prices headed higher with the July copper contract up 12 cents to $4.15 U.S. a pound following four days of losses. The base metals sector also gained as Teck Resources rose $1.25 to $46.18 and HudBay Minerals was up 42 cents to $13.78.
One of the few decliners in the group was Sherritt International Corp., down 41 cents to $6.60.
Sherritt said the capital cost of its Ambatovy project in will come in at $5.5 billion U.S., a 16% increase from its prior estimate.
The financial sector also lifted the TSX, with TD Bank ahead 22 cents to $79.43 and Scotiabank rose 75 cents to $57.65.
The industrials sector was up with Canadian Pacific Railway ahead 93 cents to $60.29.
The railway division of Bombardier Inc. has been awarded a $577-million-U.S. contract with the London Underground to supply train communications technology as part of an upgrade involving four of the networks subsurface lines. Bombardier shares advanced 30 cents to $6.90.
The gold sector advanced as bullion prices moved up with Goldcorp Inc. advancing 59 cents to $45.61.
In other corporate news, Air Canada’s customer service agents and other airport workers have walked off the job. Some 3,800 employees went on strike just after midnight EDT after talks between their union and the airline failed to reach an agreement. Its shares were ahead eight cents to $1.87.
Sino-Forest Sino-Forest Corp., the TSX-traded Chinese timberland operator facing allegations of fraud, reported it dropped to a first-quarter loss of $22.1 million versus a profit of $15.9 million a year ago. Revenue increased 35% to $339 million.
Shares in Sino-Forest have lost roughly three-quarters of their value since the allegations emerged nearly two weeks ago from short seller Muddy Waters Research, a research and investment firm. On Tuesday, the shares fell $1.55 to $3.43.
The Canadian consortium that has launched a hostile takeover bid for the TMX Group said Tuesday that Canadian securities regulatory authorities have given the OK for its two-step offer for the operator of the Toronto Stock Exchange.
Maple Group Acquisition Corp. said it has received exemptive relief from certain provisions of Canadian securities laws to allow its bid, valued at $3.7 billion, to go ahead. TMX shares were down 69 cents to $43.50.
Furniture and electronics retailer The Brick Ltd. rose to a first-quarter profit of $1.1 million from a year-earlier loss of $113,256 on the strength of its financial services division. Same-store sales were down 5.3% but its shares gained seven cents to $2.59.
On the economic front, Statistics Canada reported this morning that new motor vehicle sales fell 1.1% in April to 134,529 units. Higher sales in Quebec, Ontario and British Columbia (including the territories) were more than offset by declines in the other provinces. Truck sales were off 3% for the month.
However, the nation’s number crunchers revealed that Canadian industries operated at 79.0% of their production capacity in the first quarter, up 2.2 percentage points from 76.8% the previous quarter
ON BAYSTREET
The TSX Venture Exchange tallied 28.92 points to 1,945.21 while the Nasdaq Canada index regained 5.73 points to 590.02
In Toronto, all but one of the 14 subgroups gained ground on the day. Metals and mining grew by 2.6%, energy stocks prospered 1.9%, and global base metals improved 1.8%.
Only a 0.3% loss by telecoms broke up the party.
ON WALLSTREET
In New York, equities rallied Tuesday, with all three major indexes up more than 1%, holding gains after Federal Reserve chairman Ben Bernanke urged Congress to act on the debt ceiling.
The Dow Jones Industrial Average climbed 123.14 points, or 1.1%, to 12,076.10. A 4% jump in shares of Home Depot led the advance. Caterpillar and Boeing were also big gainers. Only Verizon was dipping in the red.
The S&P 500 rose 16.04 points to 1,287.87, with shares of JC Penney soaring 19% after the department store chain named Apple retail executive Ron Johnson as its next CEO.
The Nasdaq Composite gained 39.03 points to 2,678.72, with shares of Baidu and Green Mountain Coffee Roasters among the top winners.
Bernanke said the United States would be forced to stop payments on some existing obligations, possibly including Social Security and Medicaid, if the debt ceiling is not raised.
Investors liked what they heard, with stocks holding onto their gains. Stocks rallied right from the get-go Tuesday, following a round of better-than-expected economic data.
The Dow and Nasdaq are on track to post their best performance since April 20, while the S&P 500's one-day returns would give it the best day since early March.
Best Buy's stock surged nearly 7% in early trading, following fiscal first-quarter results that beat expectations. But investors pulled back as the session went on. Shares of the consumer electronics retailer were up 5% in the afternoon.
Smartphone makers Apple and Nokia agreed to settle their long-running patent dispute Tuesday.
Apple will pay Nokia a one-time sum, and ongoing royalties will go to Nokia. Shares of Nokia jumped 3%, while shares of Apple edged up 2%.
Meanwhile, Honda released its full-year forecast Tuesday, announcing that it expects a 63.5% drop in 2011 profit. Shares of Honda slid 0.2%.
Shares of Hewlett-Packard rose 0.3%, after the company announced a major executive shakeup late Monday.
Avis Budget Group's stock rose 5% after the car rental said it was acquiring Avis Europe for $1 billion. Avis has been awaiting regulatory approval for its $1.7-billion U.S. bid to buy Dollar Thrifty, whose shares tumbled 9%. Share of Hertz which is also courting Dollar, rose 9%.
Economically speaking, the Commerce Department said retail sales slid 0.2% in May. While it was the first decline in 11 months, it was much less of a decline than economists had expected.
Additionally, the U.S. Labor Department issued a brighter report on the producer price index, also known as manufacturer inflation. The PPI rose 0.2% in May, slightly better than the 0.1% that economists had forecast.
The price on the benchmark 10-year U.S. Treasury dropped sharply, with yields rising to 3.10%, from Monday’s 2.99%. Treasury prices and yields move in opposite directions.
Oil prices reacquired $1.88 to trade at $99.18 U.S. a barrel.
Gold futures for August delivery rose $8.80 to close at $1,524.40 U.S. an ounce.
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