Canadian stocks regained strength on Wednesday and finished solidly in the green, even amid the fear of Greece exiting the euro-zone, which initially triggered a global equities selloff.
The S&P/TSX Composite Index jumped 113.02 points, or 1%, to end Wednesday at 11,564.80 , after being stuck in the red most of the morning, sometimes by as much as 140 points.
The Canadian dollar slid 0.30 to 97.65 cents U.S.
Valeant Pharmaceuticals International Inc. slid 2.3% to $47.71, Manulife Financial Corp. declined 0.8% to $11.20, but Kinross Gold Corp. followed its cohorts in the gold sector and ballooned 3.9% to $8.49.
The financials sector featured earnings from BMO Financial Group, which beat expectations as it said its second-quarter net income was up 27% from the same time last year, rising by $215 million to nearly $1.03 billion.
The banking group’s profit amounted to $1.51 per share before adjustments. After adjustments, BMO’s net income was $982 million or $1.44 per share, eight cents higher than expectations, and its shares recovered 1.4% to $56.01 after spending much of the session in the dungeon.
Elsewhere in the financial sector, Royal Bank gained 1.5% to $52.95 and Bank of Nova Scotia nipped ahead 0.1% to $51.69.
In the energy sector, Imperial Oil climbed 0.8% to $41.75, while Canadian Natural Resources picked up 1.5% to $31.45, and Suncor prospered 0.9% to $28.56.
In other earnings news, Canaccord Financial Inc. reported a fourth-quarter loss of $31.8-million or 42 cents a share.
Excluding those items, adjusted net income was $2.1 million or two cents per common share and its shares tumbled 19 cents or 2.9% to $6.38.
Leaders of the 27 European Union countries are meeting for a summit that will focus on Europe’s economic woes and Greece’s political crisis.
There had been hopes ahead of the meeting that leaders would take some action to contain the worsening government debt crisis. But those hopes were dashed as Germany continued to refuse to back the idea of jointly-issued eurobonds.
Proponents of eurobonds say they could help mitigate the crisis by spreading debt risk across the single currency zone.
The summit takes place against a background of increasing worries about Greece’s future in the euro-zone.
An election slated for June 17 is widely considered to be a referendum on the country’s membership of the euro. The main concern is that political parties that are against the terms of the country’s bailout package will win the election. If Europe then cuts off its funding to Greece, the country may face a messy exit from the euro, raising concerns that other countries might follow.
Speaking of things economic, Statistics Canada reported this morning that Canadian retail sales rose by 0.4% in April, to $39.1 billion, a new record, powered largely by auto and clothing sales.
The agency also told us that its composite leading indicator rose 0.3% in April, matching the increase in March, running its monthly win streak to 10. Of the 10 components, seven advanced in March.
ON BAYSTREET
The TSX Venture Exchange regained 9.73 points to 1,256.48, while the Nasdaq Canada recovered 4.33 points to 367.04.
All but three of the 14 Toronto subgroups finished positive, led by gold, which shone brighter by 4.3%, materials, gaining 3.6%, and the metals and mining group, which tallied 3.4%.
The two laggards proved to be utilities, down 1.4%, and telecoms, which shaved off 0.8%. The health-care sector was flat on the day.
ON WALLSTREET
Stocks fought their way to the breakeven point, recovering their strength after tech shares led a broad selloff on Wall Street Wednesday, following disappointing earnings, sales and outlook from Dell.
The Dow Jones Industrials ended the day down 6.66 points, to wind up trading at 12,496.20
The S&P 500 nipped ahead 1.99 points to 1,318.62. The tech-rich Nasdaq Composite Index regained 11.04 points to 2,850.12.
Dell shares plunged more than 18% in heavy trading, wiping out all of its gains for the year. Dow components Microsoft and Intel were both down nearly 3% while Cisco was down about 1% and shares of Hewlett-Packard, due to report results after the close, fell nearly 5%
Investors are also keeping close tabs on Facebook and the unfolding saga there. Three investors sued Facebook and CEO Mark Zuckerberg Wednesday, along with lead underwriter Morgan Stanley and others, accusing them of withholding negative information ahead of company's initial public offering.
Shares of Facebook, which had lost 18% from its IPO price in the first two days of trading this week, rebounded about 2%. It was higher in earlier trading, pulling back when the investor lawsuit became public.
Weak earnings, sales and guidance from Dell late Tuesday sparked the sharp selloff in its shares. Rival Hewlett Packard, which is widely expected to announce mass layoffs when it reports what is forecast to be lower sales and earnings, was among the bigger losers in the tech sector after Dell.
Automaker Ford Motor had its debt upgraded out of junk bond status by Moody's late Tuesday -- an important benchmark for the automaker that will lower its borrowing costs, and allow it to reclaim collateral it put up for a credit line. Shares gained in active trading, as did those of rival General Motors, which is awaiting its own upgrade to investment grade.
Homebuilder Toll Brothers reported better-than-expected earnings and revenue that was in line with forecasts before the market open Wednesday. It also upped its guidance for the second quarter.
Shares of Hormel edged higher after the meat processor reported a better-than-expected gain in earnings before the open.
Financial stocks were under pressure early Wednesday, as Morgan Stanley leading the way lower with a 3.3% loss. But shares of JPMorgan Chase, Goldman Sachs and Bank of America down at least 1%, while Citigroup shed 2.5%.
On the economic slate, new-home sales rose more than expected in April to an annual pace of 343,000, up from 332,000 in March. The report follows a strong report on sales of existing homes Tuesday, in which sales climbed 10%.
The price on the benchmark 10-year U.S. Treasury grew, lowering the yield to 1.72% from Tuesday’s 1.79%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil surrendered $1.71 to $90.15 U.S.
Gold futures for June delivery tumbled $28.20, or 1.8%, to $1,548.40 U.S. an ounce.
