The Toronto stock market surged a bit Wednesday, finding support from rising commodity stocks after positive economic data from China helped send oil prices higher.
The S&P/TSX Composite Index floundered around much of the day trying to find its feet, but managed to get some traction by day’s end and advanced 50.12 points to 10,597.98
Investors thought they found that in data showing that prices in China fell in May for a fourth month, moderating the threat of inflation. Analysts say this gives Chinese authorities the room to provide further stimulus if they believe it is warranted without fear of inflation.
The news had also raised hopes that other figures about industrial production and retail sales, due later this week, will be similarly upbeat, providing more evidence of growing Chinese demand that can help lift other Asian economies.
Rising confidence in Asian economies has been partly responsible for the solid three-month-old rally on markets that has pushed the TSX up about 35%.
On the TSX, EnCana Corp. gained $1.51 to $62.25.
Teck Resources moved ahead 53 cents to $20.13 and Ivanhoe Mines Corp. jumped 44 cents - or 6.6% - to $7.15.
The gold sector was off as Yamana Gold Inc. has signed a deal to sell three of its mines to Aura Minerals Inc. in a deal worth about $200 million U.S. in stock and cash, the companies said Tuesday. Yamana shares declined 43 cents to $11.23 while Aura shares surged eight cents to 52 cents.
The financial sector stepped back as Bank of Montreal gave back 13 cents to $44.94 while CIBC fell 46 cents to $54.51
In other corporate news, Chrysler LLC took a step toward exiting bankruptcy protection after the U.S. Supreme Court lifted a temporary stay halting a sale of the majority of its assets to Italian automaker Fiat Group SpA. More below.
Meanwhile, auto parts supplier Martinrea International Inc. says General Motors and Chrysler are paying the company for its products in full and on time. The company's executive chairman, Rob Wildeboer, says the federal and Ontario governments have "done a particularly good job in ensuring a strong future for the Canadian auto sector." Its shares were down 15 cents to $5.25.
Connacher Oil and Gas Ltd. shares were off two cents to $1.04 after it said it plans to make a notes offering worth $150 million U.S. that should allow it to restart construction at its Algar project in the Alberta oilsands.
On the economic front, Statistics Canada reported the New Housing Price Index decreased 0.6% in April, compared with a 0.5% decline in March. This resulted in a New Housing Price Index decreasing to 153.7.
Separately, Stats Canada reported the nation's trade balance was a deficit of $179 million, compared to a $1-billion surplus expected by economists.
In corporate news, Forzani Group Ltd. reported first-quarter net loss of $1.12 million or $0.04 per share, compared to net loss of $2.82 million or $0.09 per share last year.
Meanwhile, the five unions of Air Canada acquire a 10% stake in the company as the airliner looks to avert a strike, according to the Globe and Mail.
Quebecor World believes its restructuring plan is better than a sale to RR Donnelley for about $1.56-billion U.S., according to The Canadian Press.
The Canadian dollar was off 0.33 cents to 90.17 cents U.S.
ON BAYSTREET
Of the 13 TSX subgroups, losing groups edged gainers seven to six. Telecoms were the worst off of the losers, off 1%, followed by industrials, trailing yesterday by 0.7% and gold, down 0.6%.
Gainers were propelled ahead by metals and mining stocks, picking up 3.2%, health-care stocks, up 1.5% and energy, advancing 1.3%.
The TSX Venture Exchange was off 1.57 points to end the day at 1,135.78 while the Nasdaq Canada Index went higher by 11.98 points to 798.76
ON WALLSTREET
In New York, stocks dropped off a bit Wednesday as spiking Treasury bond yields and rising commodity prices added to worries that inflation could limit the recovery effort.
The Dow Jones Industrials average stepped back 24.04 points to adjourn at 8,739.02
The S&P 500 index skidded 3.28 points to 939.15, while the Nasdaq Composite Index fell 7.05 points, to 1,853.08.
Treasury bond prices slumped, boosting the corresponding yields. The benchmark 10-year note fell 20/32 and its yield rose to 3.93% from 3.86% Tuesday. The yield had risen as high as 4%. Treasury bond prices and yields move in opposite directions.
The concerns about pricing pressure overshadowed any relief Wednesday about Chrysler's completed deal with Fiat and Home Depot's improved forecast.
Italian automaker Fiat closed a deal Wednesday to buy the good assets of the bankrupt automaker, after the Supreme Court cleared the way for the deal late Tuesday.
Fiat will take a 20% stake in the company to start with, but that holding can increase to 35% if the company reaches certain goals. The new company -- called the Chrysler Group -- will be majority-owned by the United Auto Workers union. The U.S. and Canadian governments will also own small stakes.
Chrysler is expected to start operating immediately.
On Tuesday, the government said 10 of the biggest banks were well-enough capitalized to pay back a collective $68 billion U.S.in loans received last fall at the height of the financial crisis.
The list included American Express, JPMorgan Chase and Goldman Sachs.
The Obama administration dropped its plan to limit salaries at firms that have taken bailout money, and will instead propose legislation that gives shareholders a bigger say in executive pay. Washington attorney Kenneth Feinberg was named the new "pay czar" Wednesday.
Home improvement retailer Home Depot said it now expects full-year earnings in a range of flat to down 7%, versus its earlier guidance for a decline of 7%. Shares were little changed.
The Fed released its periodic "beige book" reading on its 12 districts. The report showed the economy remained weak or got weaker between mid-April and early May, although five of the districts said there are signs the pace of the recession is slowing.
Another report showed the U.S. fiscal year deficit is now near $1 trillion U.S., after a $189.7-billion U.S. shortfall in May.
The April trade balance widened to $29.2 billion U.S. from a revised $28.5 billion in March, the Census Bureau reported. Economists surveyed by Briefing.com thought it would widen to $28.7 billion U.S.
U.S. light crude oil for July delivery rose $1.32 to settle at $71.33 U.S. a barrel on the New York Mercantile Exchange, building on earlier gains after the government's weekly inventory report showed a surprise plunge in crude supplies.
COMEX gold for August delivery settled at $954.70 U.S. an ounce, unchanged from Tuesday.
