North American markets surged Thursday afternoon as bargain-hunters continued to buy up stocks beaten down during several weeks of market chaos.
The S&P/TSX Composite Index spiked 209.26 points, or 1.7%, to close at 12,408.15
The Canadian dollar restored 0.45 cents to 100.98 cents U.S., on the feeling that the Bank of Canada will not be raising interest rates later this year, as had been widely expected.
The Toronto financial sector erased early losses to move ahead with Royal Bank up $1.51 to $51.24.
Shares in Manulife Financial Corporation gained 52 cents to $13.02 as the insurer said it is expecting to take a big charge on its books after assessing its U.S. insurance operations.
Canada’s biggest insurer also reported its net profits attributed to shareholders rose to $490 million, reversing a net loss of more than $2.4 billion a year ago. It earned 26 cents a share, surpassing analyst expectations.
The energy sector was ahead as Suncor Energy climbed 91 cents to $32.19 while Cenovus Energy rose $1.67 to $35.29 while Imperial Oil gained $2.10 to $41.12.
The gold sector lost territory, even as Goldcorp Inc. gained 18 cents to $50.72 while Barrick Gold Corp. squeaked ahead three cents to $49.75.
Mining stocks led Toronto advancers as copper prices reversed Wednesday’s decline, up 12 cents to $4.01 U.S. a pound. The mining sector gained and Teck Resources gained $1.24 to $43.05 and HudBay Minerals rose 39 cents to $12.02 and First Quantum Minerals gained $1.07 to $22.80.
Investors picked through several other earnings reports.
Canadian Tire Corp. said net income dropped 13.9% to $105.8 million in the second quarter on weakness in sales of some seasonal items due to weather conditions and costs associated with its bid to buy sporting goods retailer Forzani. Its shares gained $1.25 to $56.80.
Coffee store chain Tim Hortons reported a second-quarter profit of $95.5 million, up slightly from a year-earlier $94.1 million as revenues jumped nearly 10 per cent. Its shares gained $2.10 to $45.71.
Shares in corporate software producer Open Text Corp. fell $5.92 to $51.84 after the company reported Wednesday a 19% increase in revenue during its fourth fiscal quarter. But adjusted earnings of $61.5 million missed estimates.
Baytex Energy Corp. shares gained $1.43 to $47.77 as the oil and gas producer reported its net income for the quarter was $106.9 million, or 90 cents per share, compared to $157.4 million a year ago. Sales were $336.9 million versus $241.6 million.
On matters economic, Statistics Canada reported this morning that this country’s trade deficit with the world widened from $1.0 billion in May to $1.6 billion in June, with both imports and exports falling. The agency also said its New Housing Price Index rose 0.3% in June, following a 0.4% advance in May, mostly on the back of improvements in Toronto and Oshawa.
ON BAYSTREET
The TSX Venture Exchange gained 31.63 points to 1,783.76 while the Nasdaq Canada index rallied 17.20 points to 468.34
In Toronto, all but one of the 14 subgroups were in positive territory by the closing bell, led by global base metals, ahead 5.3%, metals and mining, up 4.8% and real-estate, 4.3% stronger.
The lone loser was in information technology, down only 0.1% at that.
ON WALLSTREET
In New York, stock markets continued what some experts called their schizophrenic week Thursday as all three indexes surged on positive earnings and labour market news.
The Dow Jones Industrials zoomed 423.37 points, or 4%, to 11,143.30
The S&P 500 gained 51.88 points to 1,172.64, while the Nasdaq jumped 111.63 to 2,492.68
On Monday the Dow sank 635 points. On Tuesday it rallied 430 points. On Wednesday it plunged 520 points.
Optimism returned Thursday, driven by a report showing jobless claims fell to a four-month low, and by Cisco Systems' better-than-expected guidance for the current quarter. Shares of Cisco jumped 16%, making the stock a top performer in all three major indexes.
A 19% rise in shares of News Corp. also propelled the S&P 500 and Nasdaq. On Wednesday, News Corp. beat earnings and sales expectations despite recent phone-hacking allegations.
Fears that France could be stripped of its AAA credit rating, in the aftermath of Standard & Poor's downgrade on the U.S., have been mounting and pressuring global markets. Investors have also been concerned about the solvency of French bank Societe Generale, or SocGen.
The relief over Europe's banking sector helped U.S. bank shares recover from the previous session's slide. Shares of Bank of America gained more than 7%, while JPMorgan Chase and Morgan Stanley rose more than 6%.
Shares of AOL soared almost 12%, after its board approved a plan to buy back $250 million U.S. in stock over the next year.
Economically speaking, a report from the U.S. Labor Department showed that weekly jobless claims fell to 395,000 last week, down 7,000 from the prior week.
That reading was better than the 409,000 claims economists were expecting.
The U.S. trade deficit grew to $53.1 billion U.S. in June, from $50.8 billion U.S. in May. The trade deficit was also wider than the $48 billion U.S. expected by economists surveyed by Briefing.com.
Prices on the 10-year Treasury note faded, correspondingly raising yields to 2.34% from Wednesday’s 2.14%. Prices and yields move in opposite directions.
Oil for September delivery gained $2.90 to $83.41 U.S. a barrel
Gold futures for December delivery fell $32.80 to $1,751.50 U.S. an ounce, after setting an intraday record high of $1,817.60 U.S. an ounce.
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