The Toronto stock market was higher Monday following several bruising losses, on hopes that the U.S. Federal Reserve will signal that it is prepared to take further measures to keep the economy from slipping back into recession.
The S&P/TSX Composite Index ended the day ahead 60.89 points to 12,068.36
The Canadian dollar eased back 0.11 cents to 101.05 cents U.S.
Both the TSX and the Dow Industrials tumbled about 4% last week on worries about the health of the U.S. and global economies and levels of European bank funding without a lasting solution for Europe’s debt troubles.
Investors are now looking ahead to Friday and a key speech by United States Fed chairman Ben Bernanke.
The Fed pledged earlier this month to keep interest rates at ultralow levels through mid-2013.
Investors wonder whether Bernanke will announce, or at least preview, further steps to help the economy including a third round of bond purchases known as quantitative easing.
A commitment by Bernanke last August to do whatever it took to keep the American economic revival on the rails during the Fed’s retreat at Jackson Hole, Wyo., sparked a rally on markets that only started to run out of steam at the start of the second quarter of this year.
In the gold sector, Barrick Gold Corp. rose $1.13 to $51.45 and Goldcorp Inc. improved by $2.38 to $53.56.
Telecoms were also strong with BCE Inc. ahead 52 cents to $38.76 while Telus Corp. climbed 35 cents to $51.98.
The TSX energy sector gave up early gains and was flat at mid-afternoon as Suncor Energy declined 49 cents to $28.73 while Cenovus Energy climbed 47 cents to $32.64.
The base metals sector also erased early gains while the September copper contract lost early momentum and turned down four cents at $3.95 U.S. a pound. Teck Resources faded 55 cents to $37.40, while First Quantum Minerals was down $1.21 to $20.00 while Sherritt International advanced eight cents to $5.04.
The financial sector declined a day before the big Canadian banks start to report quarterly earnings. Bank of Montreal hands in earnings on Tuesday, National Bank is out on Thursday while Royal Bank reports on Friday.
Bank of Montreal settled back 15 cents to $57.20, National Bank slipped 97 cents to $69.37 and Royal Bank fell 54 cents to $48.43.
In other corporate news, Clearwater Seafoods Income Fund has put into place a defence plan as Canada’s largest shellfish and lobster producer tries to fend off an unsolicited bid from Cooke Aquaculture Inc. Clearwater’s plan allows its board of trustees to pursue alternatives.
Cooke has offered to buy the remaining units of Clearwater that it doesn’t own for $3.50 each, valuing the income fund at about $97.1 million. Clearwater units were up 45 cents, or 18.8%, to $2.85.
Endeavour Mining Corp. and Adamus Resources Ltd., two international companies which trade on Canadian stock markets, have agreed to merge into a new company focused on gold mining in West Africa. Shareholders of Endeavour will own 55% of the yet-to-be-named combined company, with shareholders of Perth, Australia-based Adamus owning 45%. Endeavour shares rose 15 cents to $2.59.
Paladin Energy Ltd. has reached uranium sales agreements worth about $168 million with three new customers in the United States. The deals call for the Australian mining company to supply the buyers with more than 2.8 million pounds of uranium oxide concentrate. Paladin shares gained seven cents to $2.05.
ON BAYSTREET
The TSX Venture Exchange inched up 1.92 points to 1,766.76, while the Nasdaq Canada index improved 3.52 points to 481.53
In Toronto, nine of the 14 subgroups were ahead by the closing bell. Gold surged 4%, while materials made 2.5% worth of headway and telecoms were 1% to the good.
The five laggards were weighed by metals and mining, off 2.5%, financials, down 0.8%, and global base metals, skidding 0.6%.
ON WALLSTREET
In New York, stocks pushed higher Monday afternoon as investors grapple with an uncertain economic outlook ahead of a key speech by Fed chairman Ben Bernanke.
The Dow Jones Industrials increased 37 points by the close to 10,854.70.
The S&P 500 nipped up 0.29 points to 1,123.82, while the Nasdaq was higher by 3.54 points to 2,345.38
Hewlett-Packard was the strongest performer on the Dow, with shares rising over 3%. HP's stock plunged 20% on Friday amid concerns about the company's turnaround plan.
Shares of big financial institutions were among the biggest decliners on the blue-chip index.
Bank of America sank 6%, near its 52-week low, and JPMorgan slid 2.5%.
Stocks had a solid open following a rebound in European markets. But investors continue to struggle with fears the U.S. economy could slip back into a recession and ongoing concerns about the sovereign debt crisis in Europe.
Those issues have weighed on the market for weeks. On Friday, U.S. stocks capped a difficult week, with the S&P 500 posting its biggest four-week drop since March 2009. The Dow, S&P 500 and Nasdaq fell between 4% and 6% last week.
Meanwhile, shares of oil companies Exxon and Chevron were in focus as rebel forces swept the Libyan capital of Tripoli, poised to topple Moammar Gadhafi's 42-year rule following six months of civil war.
The tone on Monday was more optimistic as investors reconsidered the gloomy outlook for the global economy.
Experts said business and consumer confidence may not be as weak as many investors had feared.
Still, they said, investors are gravitating towards shares of blue-chip companies, while steering clear of risky bets in Europe and emerging markets.
The big event for investors this week will be on Friday, when Federal Reserve Chairman Ben Bernanke will give his keynote speech at the Kansas City Fed's annual retreat in Jackson Hole, Wyo.
The price on the benchmark 10-year U.S. Treasury dropped, lifting the yield to 2.09% from Friday’s 2.07%. Prices and yields move in opposite directions.
Oil for September delivery gained $2.04 to $84.30 U.S. a barrel
Gold futures for December delivery rose $35 to $1,887.80 U.S. an ounce. Earlier, gold futures hit an intraday high of $1,898.60 U.S. an ounce.
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