Growing confidence that the strong spring rally on stock markets still has plenty of momentum took the Toronto stock market up more than 300 points Tuesday afternoon.
The main index was helped along by a surge that is taking crude oil prices over the $60 U.S. a barrel level.
New York markets were subdued after racking up big gains Monday after a big disappointment in housing construction numbers cancelled out a positive earnings report from Home Depot Inc.
The S&P/TSX composite index leaped 324.02 points to close at 10,086.87.
Meanwhile, Canada Mortgage and Housing Corp. predicts housing starts will decline to 141,900 this year, but increase to 150,300 in 2010 as the Canadian economy recovers, bringing housing starts more in line with demographics.
CMHC chief economist Bob Dugan blames this year's expected decline on several factors, including the current economic climate, more competition from the existing home market, and the impact of the rise house prices between 2002 and 2007.
EnCana Corp. rose $2.07 to $61.30 and Suncor Inc. gained $1.39 to $35.06.
The financial sector was the other big driver to the session's gains.
Royal Bank climbed $1.48 to $43.42 and Scotiabank advanced $1.21 to $36.21.
The Toronto base metals sector ran ahead with Teck Cominco Ltd. ahead $1.32 to $15.60 and Lundin Mining Corp. advanced 35 cents to $2.69.
The gold sector was ahead slightly, as Goldcorp Inc. improved 39 cents to $39.40.
Timminco Ltd. shares fell five cents to $1.25 as it confirmed Tuesday that it will defend itself against a proposed class-action lawsuit alleging the company and its chief executive misled investors.
The action seeks $520 million on behalf of investors who bought Timminco stock between March and November last year. Its shares are down over 96% from its high last June.
The Canadian dollar climbed 0.56 cents, to 86.59 cents U.S.
ON BAYSTREET
All 13 TSX subgroups ended the day positive. Metals and mining led the celebrants, up 7.8%, energy stocks were up 5.4%, financials were next at 4%.
The TSX Venture Exchange picked up 13.40 points to 1,076.49 while the Nasdaq Canada Index nosed out a gain of 0.87 points to 715.38.
ON WALLSTREET
The Dow Jones Industrials average rolled 29.23 points into negative territory to 8,474.85.
The S&P 500 index lost 1.58 points to 908.13, while the Nasdaq Composite Index was up 2.18 points, to 1,734.54.
The Dow had charged ahead 235 points Monday after the National Association of Homebuilders reported that its survey of builder confidence increased for the second straight month in May, reflecting growing optimism on the part of many builders.
But on Tuesday, the U.S. Commerce Department reported that housing construction plunged to a record low in April as a steep drop in apartment building offset a rebound in single-family construction. Permits for new projects also hit a new low.
Construction of new homes and apartments fell 12.8% last month.
Economists had expected home construction and building permits to post modest increases in April, signs that the collapse in housing activity was drawing to a close. Many analysts say the housing market will need to stop its slide before the economy can hope to recover from the recession.
The Federal Reserve is in talks with a number of banks about repaying billions of dollars in government bailout funds they received under the Troubled Asset Relief Program.
Goldman Sachs, Morgan Stanley and JPMorgan are among the largest banks that have applied to repay TARP money, sources told Reuters. The banks are rushing to return the funds to avoid what they say are restrictive policies and demonstrate to investors that they are financially healthy.
Home Depot reported quarterly earnings that beat expectations. The home improvement retailer posted operating income of 35 cents U.S. per share, while a consensus of analyst forecasts from Thomson Reuters had expected 29 cents U.S.
Despite the report, shares of Home Depot fell nearly 4%.
Shares of luxury retailer Saks jumped 22% after it reported a smaller-than-expected quarterly loss and said it would continue to aggressively cut costs to offset declining sales.
Credit card company American Express said late Monday that it would slash 4,000 jobs, or about 6% of its global workforce.
After the close, tech bellwether Hewlett-Packard posted earnings and revenue in line with forecasts.
Treasury prices slumped, raising the yield on the benchmark 10-year note to 3.24% from 3.21% Monday. Treasury prices and yields move in opposite directions.
U.S. light crude oil for June delivery rose 62 cents to settle at $59.65 U.S. a barrel on the New York Mercantile Exchange. The contract rose to a high of $60.48 U.S. in pre-market, electronic trading.
COMEX gold for June delivery rose $5 to settle at $926.70 U.S. an ounce.
