The Toronto stock market was sharply higher Friday amid rising commodities as more political stability in Italy and Greece calmed investors at the end of a volatile week.
The S&P/TSX composite index jumped 167.98 points, or 1.4%, on the day to conclude the week at 12,276.85. During the last five trading days, the index slid 131.40 points, or 1.1%.
The Canadian dollar gained 0.45 cents to 98.75 cents U.S.
Despite Friday’s strong showing, the TSX headed for a negative week after Italy became the flashpoint for European government debt crisis worries amid a lack of confidence that the country can deal with its huge debts of €1.9 trillion, which is too big for Europe’s current bailout facility to handle.
However, expectations that incoming PM Mario Monti will lead a post-Berlusconi government has helped calm those jitters, and Italy’s 10-year bond yield was now down below the 7% threshold that eventually forced Greece, Ireland and Portugal to seek bailouts. It fell another 0.17 percentage points Friday at 6.62%
Markets were reassured as Italy took concrete steps to deal with reining in its huge debt.
The Senate in Rome voted Friday to pass a budget bill containing economic reforms demanded by the European Union.
The lower Chamber of Deputies could take up the legislation as early as Saturday, which paves the way for the resignation of Prime Minister Silvio Berlusconi, who was seen as an obstacle to meaningful economic reforms. He is expected to be replaced by Monti, a respected economist.
And in Athens, premier Lucas Papademos swore in a new cabinet Friday, a day after being appointed to head an interim coalition government that will push through a new European debt deal and secure continued bailout funding to prevent a catastrophic default.
The energy sector rose as Suncor Energy gained 75 cents to $32.36 and Imperial Oil rose 63 cents to $42.40.
The base metals sector rose while metal prices also advanced as December copper on the Nymex edged up seven cents to $3.44 U.S. a pound. Teck Resources climbed 56 cents to $38.31 and First Quantum Minerals advanced 77 cents to $18.97.
The gold sector was ahead Barrick Gold Corp. improved by $1.70 to $53.72 and Goldcorp Inc. ran up $2.28 to $54.58.
The financials sector also provided lift, with Scotiabank ahead 38 cents to $51.37 and Royal Bank climbed 65 cents to $45.65.
Shares in TransCanada Corp.’s were ahead 96 cents to $40.81 after the U.S. State Department said Thursday it wants the company to explore other routes for the controversial Keystone XL pipeline so it skirts ecologically sensitive areas of Nebraska.
That will delay the $7-billion U.S. project by years, and could kill it outright if TransCanada customers lose patience and find other alternatives. TransCanada shares had lost almost 9% in the last two weeks.
In earnings news, investor Brookfield Asset Management Inc. reported third-quarter net income of $716 million U.S., or 36 cents per share, from $342 million, or 16 cents per share a year earlier. Revenue increased to $4.58 billion from $3.55 billion. It shares gained 52 cents to $29.14.
Lumber company Stella-Jones Inc. said quarterly net income grew to $16.6 million, or $1.03 a share. That’s an increase from $12.4 million, or 78 cents per share, a year ago. Sales rose to $181.8 million from $161.3 million and its shares ran ahead 85 cents to $40.60.
ON BAYSTREET
The TSX Venture Exchange advanced 16.75 points to 1,641.31, while the Nasdaq Canada index gained 12.71 points to 412.55
All but one of the 14 Toronto subgroups were higher by the week’s final bell, led by gold, which vaulted 2.8%, while materials hiked 2.5%, and the metals and mining group moved up 2.4%.
Only a 0.09% skid by consumer staples spoiled the party.
ON WALLSTREET
In New York, stocks rallied Friday, advancing for a second straight session, as leaders in Italy and Greece took measures to curb the region's ongoing debt crisis.
The Dow Jones Industrials grew 259.89 points, or 2.2%, to 12,153.70. On the week, the blue chips rocketed 170.50 points, or 1.4%, higher.
The S&P 500 gained 24.16 points to 1,263.85, while the Nasdaq Composite Index picked up 53.60 points to 2,677.59.
U.S. stocks snapped back Thursday from a steep selloff earlier this week, as Italian bond yields eased slightly and positive corporate and economic news lifted the mood on Wall Street.
But trading will likely remain choppy until more decisive steps are taken toward solving the European debt crisis.
E*Trade shares slumped after the company said Thursday that it is not for sale -- ending ongoing speculation that the online brokerage would be acquired. The stock was the biggest declined on the S&P 500.
Disney reported record-setting earnings after the closing bell Thursday, posting a 21% gain in net income for the 2011 fiscal year. Shares of the media giant jumped Friday, leading the gains on the Dow and S&P 500.
Shares of Nordstrom slipped after the department store chain reported an increase in quarterly earnings after the close Thursday but lowered its full-year outlook.
Shares of Nvidia rose after the chipmaker posted a third-quarter profit late Thursday that more than doubled from a year earlier.
Friday's rally was sparked by high hopes voiced by experts that Greece and Italy are, as they put it, "on the right track and moving in the right direction".
Greece swore in a new prime minister, Lucas Papademos, early Friday morning. Papademos, a former banker and European Central Bank vice president, was appointed Thursday and plans to form a new national unity government.
That government is expected to pass the controversial bailout package European leaders agreed to late last month, which had been a condition former Prime Minister George Papandreou set as part of his resignation.
That puts Greece on track to get its €8-billion installment from a separate international agreement brokered in May 2010, allowing it to pay its bills next month and avoid immediate default.
Meanwhile, Italy's senate passed a series of austerity measures demanded by Europe, as it seeks to ward off fears of a debt-driven crisis.
Economically speaking, better-than-expected reading on consumer sentiment also boosted stocks.
The University of Michigan consumer sentiment index for November to 64.2, up from 60.9 in October and above a consensus forecast for 61.3. The reading was the highest in five months.
Bond markets were closed for Veterans Day
Oil for October delivery advanced $1.19 to $98.97 U.S. a barrel
Gold futures for December delivery rose $25.20 to settle at $1,784.80 U.S. an ounce.
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