The Toronto stock market and the Canadian dollar were sharply higher Thursday after U.S. Federal Reserve chairman Ben Bernanke offered reassurances that stimulus measures aren't going away any time soon.
The S&P/TSX Composite Index soared 186.33 points, or 1.5%, to close at 12,493.26, pushing the TSX back into positive territory for the year.
The Canadian dollar climbed 0.7 cents to 96.26 cents U.S.
Gold prices have enjoyed a sharp increase in recent years as a result of quantitative easing by the Fed and other central banks worldwide because QE involves printing more money to finance bond purchases.
But prices have fallen sharply in the weeks since Bernanke initially indicated that the Fed could move towards tapering those purchases.
The gold sector went skyward on Thursday, as Barrick Gold Corp. rose $1.13, or 7.7%, to $15.82 while Goldcorp Inc. climbed $1.78, or 7%, to $27.13.
The sector is the worst performer by far on the TSX but has come off the worst declines of the year recently.
The lower dollar also helped boost metal prices with September copper ahead nine cents to $3.18 U.S. a pound.
The lower U.S. dollar lifted commodities because a weaker greenback makes it less expensive for holders of other currencies to buy oil and metals, which are dollar-denominated.
The base metals component climbed while First Quantum Minerals advanced 71 cents, or 4.5%, to $16.39 and Teck Resources improved by $1.44, or 6.6%, to $23.28.
The energy group was ahead even as the August crude contract on the Nymex backed off after the International Energy Agency said that production from countries outside the Organization of the Petroleum Exporting Countries would rise by 1.3 million barrels a day next year.
Prices had closed at a 15-month high Wednesday after the American Petroleum Institute said that U.S. crude inventories fell by nine million barrels last week, much higher than the 3.8-million-barrel drop that analysts had expected.
Cenovus Energy was up 67 cents to $32.33 while Canadian Natural Resources advanced 68 cents to $33.35.
Financials rose as Scotiabank climbed $1.17 to $56.91.
Telecoms were also supportive as Telus Corp. gained 35 cents to $31.79.
On the earnings front, Quebec-based cable company Cogeco Cable reported its third-quarter revenue increased 45.3% to $464.5 million from $319.8 million in the same 2012 period.
Profit declined fractionally to $53.05 million, or $1.08 per diluted share, from $53.12 million or $1.09 per share in the prior-year period and its shares gained $2.68, or 5.8%, to $49.21.
Corus Entertainment Inc. said that its quarterly net income was $89.9 million or $1.07 per diluted share, up from $43.2 million or 51 cents a year ago, largely as a result of a gain from the sale of its non-controlling interest in Food Network Canada for $55.4 million.
Ex-items, earnings were $34.5 million or 41 cents per share, down from $43.2 million or 52 cents a year earlier. Revenue was $200.1 million, down from $204.1 million. Corus also reduced its full-year guidance on profit and its shares fell $1.25, or 5.1%, to $23.50.
On the economic slate, Statistics Canada said its new housing price index kept its winning streak alive by rising 0.1% in May, following a 0.2% increase in April.
ON BAYSTREET
The TSX Venture Exchange leaped 14.67 points to 893.81
All 14 Toronto subgroups were positive by the end of the session, with gold shooting 6.3%, while materials pointed higher 4.4% and the metals and mining improved 3.8%.
ON WALLSTREET
U.S. stocks soared back into record territory Thursday, as investors welcomed comments from Federal Reserve Chairman Ben Bernanke.
The Dow Jones Industrials added 169.26 points, or 1.1% to 15,460.90. That put the blue-chip average above the record closing high it hit in May.
The S&P 500 index strengthened 23.68 points to 1,676.30, also topping its record closing high. The NASDAQ Composite increased 57.55 points to 3,578.30
The gains came after Bernanke said late Wednesday that monetary policy would remain "highly accommodative" for the foreseeable future.
Investors were spooked in May when Bernanke suggested the Fed could begin to scale back its $85-billion-U.S. per-month bond buying program this year. But top central bankers, including the chairman, have taken great pains to reassure investors that any tapering would depend on continued improvement in the economy.
Microsoft announced a widely-anticipated reorganization of its business operations, including a shakeup of high-level managers, according to various reports.
Shares of Yum! Brands reported earnings that beat expectations but worries about the KFC owner's growth in China pushed Yum Brands' stock lower.
AMD shares surged 11% after Bank of America analysts upgraded the company's stock. Other tech stocks hit fresh record highs, including Google and Amazon
Bernanke's comments about maintaining low interest rates boosted homebuilders' stocks.D.R. Horton, Lennar and Toll Brothers gained between 6% and 7%.
Conversely, regional banks, which usually benefit from higher rates, came under pressure. Shares of Regions Financial Corporation, Comerica, KeyCorp and SunTrust Banks fell between 2% to 3%.
Quarterly results are coming up Friday from mega-banks JPMorgan and Wells Fargo
In economic news, the number of Americans filing for first-time unemployment benefits rose to a two-month high, according to the government's weekly report. But economists were quick to brush off the rise as a result of volatile number-crunching, rather than a discouraging sign for the economy.
Prices for the 10-year U.S. Treasury hiked, dropping yields to 2.57% from Wednesday’s 2.68%. Treasury prices and yields move in opposite directions.
Oil prices lost $1.70 to $104.82 U.S. a barrel.
Gold prices gained $37.10 to $1,284.50 U.S. an ounce.
