A broad-based advanced lifted the Toronto stock market sharply mid-afternoon today as an unexpectedly positive dose of U.S. economic data raised hopes for an economic recovery.
But at the same time, the U.S. Federal Reserve warned that the economy will likely remain weak, which will keep a lid on inflation.
The S&P/TSX Composite Index surged 202.47 points or 2.05% to reach 10,123.68. The rise only partially offset a 454-point plunge on Monday, which was triggered by a World Bank report that global economic contraction this year would be worse than thought.
A multi-billion-dollar takeover offer for Toronto-listed Addax Petroleum helped lift energy stocks. Geneva based Addax said today it has reached a deal that will see it be acquired by Chinese oil and gas giant Sinopec International Petroleum Exploration and Production Corp. for $8.27 billion.
The wholly-owned subsidiary of China Petrochemical Corp. will pay $52.80 per share. Its shares closed Tuesday at $45.65 and today its shares rose $3.48 to $49.13.
Overall, the energy sector was higher as sector heavyweight EnCana Corp. gained 44 cents to $55.47.
Elsewhere on the TSX, the base metals sector was higher as the price of copper gained 6.8 cents to $2.268 U.S. a pound. Teck Resources gained 72 cents to $18.56.
The financial sector gained with TD Bank ahead 91 cents to $56.84.
Investment management firm AGF Management Ltd. said second quarter profits were down 61% from a year ago to $17.2 million. AGF said profits and revenues were dragged down by continued global market weakness. Its shares were ahead 64 cents to $11.65.
The gold sector rose, as Yamana Gold Inc. gained 35 cents to $10.46.
Canadian dairy company Saputo Inc. said Tuesday it has signed a deal to buy cheesemaker F&A Dairy of California Inc. Terms of the deal were not immediately available. Saputo shares added nine cents to $23.20.
The Fed also held a key bank lending rate at a record low of between zero and 0.25%, and pledged again to keep it there for "an extended period to help brace activity going forward."
Also on Wednesday, the Organization for Economic Cooperation and Development suggested the Bank of Canada leave its interest rates at 0.25% through 2010. The OECD also raised its outlook for its 30 member nations for the first time in two years.
The Teranet-National Bank National Composite House Price Index dropped 6.7% in the month of April, falling for a fifth straight month.
The Canadian dollar subsided 0.24 cents to 86.75 cents U.S.
ON BAYSTREET
All 13 TSX subgroups stayed positive from start to finish Wednesday, metals and mining the biggest winner, up 3.7%, gold and financials next at 2.6% each.
The TSX Venture Exchange garnered 16.48 more points to 1,090.66 while the Nasdaq Canada Index increased in strength 13.07 points to 696.86
ON WALLSTREET
In New York, blue chips slipped and a tech rally lost steam after the Federal Reserve kept a key short-term lending rate at a historic low, as expected, and said the economy shows signs of stabilizing.
The Dow Jones Industrials average gave back earlier gains and fell back 23.05 points to end the day at 8,299.86. The S&P 500 index came off its highs of the day, but still picked up 5.84 points to 900.94. The Nasdaq surged 27.42 points to 1,792.34.
The government's report on durable goods showed an increase of 1.8% in May. This was a turn-about from the 0.9% decline that was expected by a consensus of economists surveyed by Briefing.com. The government slightly revised its durable goods report for April to a gain of 1.8%.
May new home sales fell to a 342,000 annualized unit rate, from a 344,000 annualized rate in April. Economists thought sales would rise to a 360,000 unit annualized rate.
Rite Aid reported its eighth consecutive quarterly loss on Wednesday. The drugstore chain said it lost 11 cents U.S. per share in the most recent quarter, compared to a loss of 20 cents in the year-ago quarter.
Monsanto, a producer of seeds for agriculture, reported a decline in profit to $1.25 U.S. diluted earnings per share, compared to the year-ago profit of $1.45 U.S. per share.
Oracle reported weaker quarterly sales and earnings that topped estimates, profit margins at a record high and software sales that fell less than expected. The business software maker also forecast first-quarter sales and earnings that are above analysts' forecasts. Shares jumped 9%.
Oracle is the number-two U.S. software company and has connections to many other companies, so its positive results are important for the broader tech sector
A variety of other influential technology companies gained too, including Dow components IBM, Intel and Microsoft.
A variety of bank stocks advanced, including Bank of America and Goldman Sachs.
In other financial sector news, Citigroup said it was boosting the base pay of its employees, but keeping total compensation unchanged, as it looks for ways to "retain talent" despite bonus limits imposed by Congress. Citi has received two government bailouts and one of the terms of the help is a limit on bonuses.
Treasury prices slid, moving the yield up to 3.70%. Treasury prices and yields move in opposite directions.
Oil prices moved 57 cents lower per barrel to $68.58 U.S.
Gold was $10 higher per ounce, to $934.00 U.S.
