The Toronto stock market was higher Wednesday after a big chunk of uncertainty was removed from Europe’s efforts to solve a debt crisis that has been dragging on for almost three years.
The S&P/TSX Composite index gained 12.17 points to end the day at 12,232.62, after Germany’s high court on Wednesday rejected calls to block the European Union’s permanent rescue fund.
Opponents had challenged Germany’s ratification of the European Stability Mechanism, which is a new, permanent €500 billion bailout fund for the 17 countries that use the euro. They had argued that it violated Germany’s constitution and sought an injunction preventing the country’s president from signing the legislation into law.
Germany’s ratification of the ESM is key, because the fund cannot work without the country’s participation.
The Canadian dollar sagged 0.37 cents at 102.39 cents U.S.
Industrials led TSX gainers as transport giant Bombardier Inc. gained 13 cents to $3.70.
The base metals sector gained ground while copper prices backed off slightly after rallying for the past three sessions with the December contract down one cent to $3.68 U.S. a pound. The metal, viewed as an economic barometer as it is used in so many applications, has run up 18 cents over the last three sessions.
First Quantum Minerals climbed 47 cents to $22.07 while Thompson Creek Metals gained 11 cents to $3.33.
The energy component improved, though Canadian Natural Resources fell 27 cents to $31.91 and Cenovus Energy up five cents to $34.07.
The gold sector declined, as Barrick Gold Corp. was 32 cents higher to $38.72.
In corporate news, the power struggle between the board of Telus Corp. and New York hedge fund Mason Capital Management LLC appears headed for an appeal court. Mason says it will appeal a B.C. court decision that blocks it from holding a shareholders meeting for investors with Telus voting stock, a move that rivals the company’s own plans for a meeting of all voting and non-voting shareholders.
Telus and Mason are in a bitter public battle over a plan to eliminate the Canadian telecom company’s dual-class share structure. Mason opposes a Telus plan that would swap non-voting stock for common stock on a one-to-one basis, arguing that doesn’t recognize the greater market value of the voting shares.
Telus voting shares advanced 64 cents to $61.82 while its non-voting A shares gained 78 cents to $62.39.
In other corporate news, Dollarama Inc. had a net profit of $49.8 million in its second quarter, up 32% from the comparable period last year. Dollarama’s revenue was up 13.8%, rising to $441 million from $387.5 million for the corresponding period last year. The profit amounted to 66 cents per diluted share, two cents higher than analyst forecasts but its shares gained 32 cents to $58.98.
ON BAYSTREET
The TSX Venture Exchange advanced 8.05 points to 1,282.62
Nine of the 14 Toronto subgroups ended the day positive. Health-care stocks picked up 1.2%, metals and mining were 0.6% better and global base metals were 0.5% to the good.
The five laggards were weighed by consumer staples, off 1%, information technology, shedding 0.8% and financials, down 0.2%.
ON WALLSTREET
U.S. stocks were up modestly Wednesday as investors look beyond the latest development in Europe to focus on the possibility of the Federal Reserve announcing another round of quantitative easing.
The Dow Jones Industrial average remained positive 29.99 points to end Wednesday at 13,333.30
The S&P 500 index gained three points, to 1,436.56, and the tech-heavy Nasdaq Composite Index added 9.79 points to 3,114.31.
Bank stocks initially got a lift from the expectations of another round of quantitative easing,or QE3, with Citigroup jumping nearly 2%. But Citi, Bank of America, JPMorgan, Morgan Stanley and Wells Fargo all pared their gains as the morning wore on.
In other corporate news, Apple unveiled the iPhone 5 at an investor event. Shares of the company were up slightly as investors saw the thinner, lighter version of its iconic phone.
Facebook shares rose more than 7%, a day after CEO Mark Zuckerberg made his first public interview since the company's IPO.
Speaking at TechCrunch Disrupt in San Francisco, Zuckerberg said he was disappointed by the stock's performance and pledged to stick to Facebook's mission.
Also, aerospace companies BAE Systems and European Aeronautic Defence & Space Co. are reportedly in merger talks.
Chesapeake Energy agreed to sell most of its properties in the Permian Basin in West Texas for roughly $6.9 billion U.S. The natural gas company will sell the Delaware Basin portion to Royal Dutch Shell in a deal valued just below $2 billion U.S. Chevron and Global Infrastructure Partners will also buy portions of the acreage.
The gains followed a critical decision by Germany's Constitutional Court. The court dismissed complaints on the legality of the European Stability Mechanism, a permanent bailout fund that's expected to have a maximum lending capacity of €500 billion.
Investors were anxious about how the ruling would impact the European Central Bank's plans to preserve the euro, which remained at its highest level against the U.S. dollar in four months early Wednesday.
On matters economic, the U.S. Bureau of Labor Statistics reported Wednesday that import prices rose 0.7% in August, after declining 0.7% the prior month. Export prices rose 0.9% in August, after rising 0.4% the prior month. The government also reported that total inventories rose 0.7% in July.
The price on the benchmark 10-year U.S. Treasury fell hard, boosting yields to 1.76% from Tuesday’s 1.69%. Treasury prices and yields move in opposite directions
Oil prices for September delivery fell back 38 cents to $96.83 U.S. a barrel.
Gold futures for December delivery fell $2.30 to $1,732.60 U.S. an ounce.
