Toronto and New York indexes registered solid, triple-digit advances Thursday amid positive news from the G20 conference and a change to U.S. accounting rules that had forced banks to value their assets at current prices.
The S&P/TSX Composite Index gained 131.32 points to end the session at 9,073.14. The strong showing extended a rally that started March 10 and, as of Wednesday's close, had lifted the TSX and the Dow industrials about 18% from multi-year lows.
Markets reacted positively to the final communique of the G20 summit in London, where leaders pledged an additional $1.1 trillion U.S. in financing to the International Monetary Fund and other global institutions and declared a crackdown on tax havens and hedge funds.
The leaders announced the creation of a supervisory body to flag problems in the global financial system - but did not satisfy calls from the U.S. and others for new stimulus measures.
The Toronto market got added lift from rising crude prices. The energy sector climbed as EnCana Corp. gained $1.69 to $55.24 and Suncor Inc. ran ahead $1.41 to $29.96.
The financial sector gained as Manulife Financial bounded ahead $1.57 to $16.65 and Bank of Montreal moved up 46 cents to $34.38.
The industrials sector gained with shares in transportation giant Bombardier Inc. up 28 cents to $3.31 after the Montreal-based company said it is cutting 10%, or 3,000 of its aerospace division workers. Declining aircraft sales have prompted Bombardier to reduce its business and regional jet production outlook for the coming year.
The announcement also came as the Montreal-based company reported financial results that show an increase in both profits and revenues for Bombardier's fourth quarter and full business year.
Elsewhere in the group, Canadian National Railways advanced $1.84 to $47.06.
The gold sector was the biggest TSX drag, as Barrick Gold Corp. faded $2.34 to $40.46 while Goldcorp Inc. was down $3.34 to $40.66.
H&R Real Estate Investment Trust says it has obtained $425 million worth of financing for its Bow tower, a massive skyscraper project that is to serve as headquarters for EnCana. H&R’s units gained 60 cents to $8.20.
On the economic front, Bank of Canada Governor Mark Carney, who won support from Prime Minister Stephen Harper to implement extraordinary monetary measures, is likely to say policy makers are ready to buy commercial paper and other corporate debt to spur the economy, and create new money to pay for it.
Carney, who has almost run out of room to cut interest rates, said he’ll detail rules on April 23 for how so-called quantitative and credit easing policies would work. They may include plans for purchases of corporate debt, including commercial paper, if needed to boost the economy.
The Canadian dollar was up 1.36 cents to 80.61 cents U.S.
ON BAYSTREET
Of the 13 TSX subgroups, all but two were positive. Industrials raced ahead 4.2%, followed by energy, up 4.1%, real-estate was next at 3.2%.
Gold was one of two losing groups, down 7.4%, the other being materials, off 4.4%
The TSX Venture Exchange lifted itself to a gain of 8.18 to 978.27 while the Nasdaq Canada Index added 28.12 points to 497.13
ON WALLSTREET
The Dow Jones Industrials average sailed 216.48 points higher, to end the day at 7,978.08. The Dow had risen as much as 314 points during the afternoon, topping 8,000 for the first time during a session since Feb. 9.
The S&P 500 index 23.30 gained points to close at 834.38, while the Nasdaq picked up 51.03 points to 1,602.63. All three indices came off highs for the day, but were still at least 2.7% higher Thursday. Since hitting a 12-1/2 year low on March 9, the S&P 500 has rallied 24% as of Thursday afternoon.
A variety of stocks gained, including financial shares such as Bank of America, Wells Fargo and Goldman Sachs.
But the gains were broad based, with all but two of the Dow 30 rising, led by IBM, McDonald's, 3M, Procter & Gamble and United Technologies.
A spike in oil prices gave a boost to the Dow's oil components, Chevron and Exxon Mobil.
Economically speaking, readings helped boost hopes that the U.S. is getting past the worst of its economic downturn.
There was more disquieting news on the employment front a day before the U.S. government releases its March non-farms payroll report.
The U.S. Labour Department said new jobless claims rose to 669,000 last week from the previous week's revised figure of 657,000.
That total was above analysts' expectations and the highest in more than 26 years, though the work force has grown by about half since then.
Economists forecast that tomorrow's report will show employers cut 654,000 jobs in March, while the unemployment rate increased to 8.5% from 8.1%.
Orders for U.S.-made factory goods increased 1.8% in February, the first gain after six months of large declines, the Commerce Department reported Thursday.
Excluding transportation goods, orders rose 1.6%. Excluding the 36% increase in defense goods, orders rose 0.9%. An increase of 1.5% was expected for February, compared to a decline of 1.9% the prior month.
Also, the independent Financial Accounting Standards Board changed the so-called mark-to-market accounting rules, which require companies to value assets at prices reflecting current market conditions.
The changes will allow the assets to be valued at what they would go for in an "orderly" sale, as opposed to a forced or distressed sale.
Treasury prices tumbled, raising the yield on the benchmark 10-year note to 2.74% from 2.65% Wednesday. Treasury prices and yields move in opposite directions.
U.S. light crude oil for May delivery rallied $4.25 to settle at $62.54 U.S. a barrel on the New York Mercantile Exchange, a jump of 8.8%.
COMEX gold for June delivery fell $18.80 to settle at $908.90 U.S. an ounce.
