Canadian stocks were sharply higher Tuesday as energy and metals shares rallied, helped by positive sentiment from G-7 talks on the European crisis and some deal news.
The S&P/TSX Composite Index gained 171.79 points, or 1.5%, to conclude the day’s trading at 11,507.56, coming back from two straight days of losses.
The Canadian dollar grew 0.14 of a cent to 96.36 cents U.S. as the bank kept the door open for future rate hikes.
TransCanada Corp. shares rose 1% to $42.95, after the energy company announced that it has been selected by Shell for a $4-billion project to build a major pipeline in Canada to transport natural gas.
Rivals Imperial Oil surged 3.8% to $41.51, while Suncor shares picked up 2.8% to $28.34.
Separately, Caterpillar Inc. announced a partnership with Westport Innovations Inc. to develop a natural gas fuel system for off-road equipment. Westport shares jumped 20.3% to $27.85.
Outside the TSX Composite, Miranda Technologies Inc. shares surged 62.4% to $16.87 after the provider of hardware and software to the television industry agreed to a buyout by Belden Inc. for $17 a share.
Elsewhere, Research In Motion recovered 3.3% to $10.36.
In the gold field, Kinross Gold improved 1.4% to $9.03, while Goldcorp. Inc. gained 1.4% to $41.74, but Barrick Gold faded 0.3% to $43.62.
Finance ministers and central bank governors from seven of the world's most industrialized powers are grappling with Europe's shaky economic situation and were to hold a conference call Tuesday to discuss a response.
Traders also took in a widely-expected announcement from the Bank of Canada that it was leaving its key interest rate unchanged at one per cent because of a worsening economic environment.
In its accompanying statement, Canada's central bank said "to the extent that the economic expansion continues and the current excess supply in the economy is gradually absorbed, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate."
On the economic slate, Statistics Canada reported this morning that the value of building permits fell 5.2% to $6.5 billion in April, ending a win streak at two straight months.
ON BAYSTREET
The TSX Venture Exchange gained 7.02 points to 1,285.57. The Nasdaq Canada index tacked on 8.72 points to 355.98
All 14 Toronto subgroups were in the green by the final bell, led by energy issues, up 2.5%, while utilities and materials each gained 1.6%.
ON WALLSTREET
U.S. stocks edged higher Tuesday afternoon, but the gains were limited as investors weighed an upbeat U.S. economic report against Europe's ongoing debt problems.
The Dow Jones Industrials moved higher by 26.49 points to finish the day at 12,128.
The S&P 500 was 7.54 points better to 1,285.72. The tech-rich Nasdaq Composite Index was up 18.10 points to 2,778.11
A better-than-expected reading of the Institute for Supply Management Services index gave markets a lift. But ongoing concerns about Europe's debt problems kept the gains in check, as the Spanish banking system teeters on the edge of collapse and Greece comes closer to a possible exit from the euro.
U.S. financial stocks were among the biggest gainers on the news. Shares of JPMorgan Chase, Bank of America and Morgan Stanley were all up about 3%.
Shares of Starbucks fell a day after the company announced plans to buy a bakery chain.
Facebook shares turned lower Tuesday afternoon, and remained nearly 30% below the IPO price of $38 U.S. per share.
Reports Monday that Facebook is looking at ways to allow children younger than 13 to use the site is prompting new criticism of the social networking company.
Netflix shares nudged higher after the company announced late Monday that it would start its own content delivery network to provide its streaming service to customers. Shares of Akamai, a tech company that currently provides some of that service to Netflix, slid.
Shares of Research in Motion rebounded slightly Tuesday. The BlackBerry maker closed below $10 U.S. a share on Monday -- the lowest level since December 2003.
Spain's Treasury Minister Cristobal Montoro told a Spanish radio network early Tuesday that the country has been nearly shut out of global finance markets, and that the country’s banking system would need help from other European countries. Yields on Spain's 10-year bond jumped as high as 6.5% before pulling back.
Credit rating agency Standard & Poor's said Monday that there is a one-in-three chance Greece will leave the euro currency union in the coming months.
Finance officials of the world's seven largest economies, the G-7, are reportedly holding an emergency call Tuesday to discuss the crisis.
Economically speaking, the ISM's services index for May rose to 53.7, surprising economists who had forecast the index to fall slightly to 53.1 from April's 53.5. Any reading above 50 still indicated growth in the service sector, which makes up the majority of the U.S. economy.
The price on the benchmark 10-year U.S. Treasury lost some ground, raising yields to 1.56% from Monday’s 1.53%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil inched higher 20 cents Tuesday to $84.18 U.S.
Gold futures for August delivery rose $3 to $1,616.90 U.S. an ounce.
