Resource stocks helped push the Toronto stock market higher Wednesday as commodity prices ran ahead amid new measures that can hopefully help deal with the euro-zone’s government debt crisis.
The S&P/TSX composite index rocketed 154.41 points, or 1.3%, to close at 12,029.96, cracking the psychologically-important 12,000 mark for the first time in weeks.
The Canadian dollar was ahead 1.26 cents to 98.33 cents U.S.
The president of the European Commission said Wednesday that banks should temporarily increase their capital buffers to better withstand the crisis. Jose-Manuel Barroso said if banks can’t raise the capital on the market, they should get help from governments, who in turn can ask for capital from the euro-zone bailout fund.
Barroso also called for a permanent bailout fund, the European Stability Mechanism, to come into force already in mid-2012, one year ahead of schedule.
The plan from the E.U. comes a day after Slovakia rejected a bill that would have given more power to Europe’s financial rescue program. Sixteen other countries that use the euro have already approved the bill, but the measure requires unanimous support. Investors predict the bill will ultimately pass.
The energy sector rose as Suncor Energy rose 72 cents to $29.57 and Imperial Oil gained 63 cents to $39.61.
The base metals sector rose as copper prices also advanced with the December contract on the Nymex ahead 10 cents to $3.39 U.S. a pound. Teck Resources climbed 77 cents to $36.06 and HudBay Minerals was up 26 cents to $10.91.
The financials sector also supported the TSX as TD Bank improved by 94 cents to $75.20 and Royal Bank gained 88 cents to $48.83.
The gold sector was lower while Barrick Gold faded 34 cents to $48.98.
Research in Motion Ltd. was again in focus as technical glitches that have affected millions of BlackBerry users around the world spread to Canada on Wednesday morning as widespread outages were reported for the smartphone’s text and email services. RIM shares fell 87 cents to $24.27.
Economically speaking, new house prices in Canada poked up 0.1% in August. Figures released this morning by Statistics Canada added that prices moved up by the same proportion in July.
ON BAYSTREET
The TSX Venture Exchange moved forward 31.64 points to 1,542.77 while the Nasdaq Canada index regained 1.09 points to 453.67
Of the 14 Toronto subgroups, all but two were in positive territory by the closing bell. Metals and mining stocks strengthened 3.4%, while energy catapulted 3%, and financials surged 1.5%.
The lone naysayers were gold, down 0.4%, and information technology, off 0.2%.
ON WALLSTREET
In New York, bank stocks led a broad rally that pulled the Dow Jones Industrials out of the red for the year, as investors welcomed the latest plan to recapitalize European banks.
Wednesday, the blue-chip index leaped 102.55 points to end the session at 11,518.80.
The S&P 500 spiked 11.71 points to 1,207.25, while the Nasdaq moved forward 21.70 points to 2,604.73
Financial stocks were leading the gains, with JPMorgan Chase, Bank of America, Citigroup and Wells Fargo up between 3% and 6%.
Shares of Alcoa slipped after the aluminum producer reported quarterly income that fell short of analysts' expectations, but the company brought in more revenue than anticipated.
PepsiCo's stock rose after the company reported stronger revenue Wednesday on global snack and beverage volume. PepsiCo also saw gains from its acquisition of Wimm-Bill-Dann, a Russian dairy and juice company.
Meanwhile, shares of Liz Claiborne surged after the apparel and accessories maker announced it is selling several of its brands for $328 million U.S. J.C. Penney is buying the company's namesake Liz Claiborne brand as well as the Monet brand. Liz Claiborne also sold its Dana Buchman brand to Kohl's.
Shares of Wal-Mart moved higher after company executives told an annual meeting for analysts that same-store sales have been positive for the past three months. Sales at the world's largest retailer have been declining for nine straight quarters. Wal-Mart is scheduled to report third-quarter results next month.
Stocks have been climbing since the start of the month as hopes for a solution to Europe's debt crisis continue to mount.
Wednesday's advance was the sixth out the last seven days for the S&P 500 and Nasdaq, and fifth for the Dow. The three major indexes are up between 8% and 12% since Oct. 3, when stocks hit their lowest levels in over a year.
Every development overseas is getting investors' front-and-centre attention. More than 80% of the experts surveyed by CNNMoney agree that debt problems overseas are the most challenging hurdle for the market.
Overall, S&P 500 company earnings are expected to have climbed almost 13% in the third quarter of 2011, according to earnings tracker Thomson Reuters. Revenues of the companies in the benchmark index are expected to have risen 10%.
On the economic front, Federal Reserve policymakers left the door open to another round of asset purchases, or QE3, in the near future, according to minutes of their most recent meeting. In September, the central bank stopped short of expanding its balance sheet and launched so-called Operation Twist, a program to shift assets from short-term Treasuries into long-term Treasuries.
The U.S. Senate failed to approve President Obama's jobs bill. The 50-49 vote in favour of the measure fell short of the 60 senators needed to advance the $447-billion U.S. plan.
The city council of Harrisburg, Pennsylvania, voted to file for bankruptcy protection Tuesday night. The state capital of Pennsylvania, with just under 50,000 residents, was facing a possible takeover of its operations by the state government under a receivership.
The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 2.23% from 2.16% late Tuesday. Treasury prices and yields move in opposite directions.
Oil for October delivery slid 66 cents to $85.15 U.S. a barrel.
Gold futures for December delivery rose $21.60 to $1,682.60 U.S. an ounce.
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