Canadian stocks moved modestly higher on Tuesday, continuing a recent uptrend. Strength in the healthcare sector has outweighed weakness for mining stocks.
Soon before the closing bell, the S&P TSX Composite index was up 68.62 points, to 11,321.85, on target to extend an 11 1/2-month high.
On the TSX, Suncor Inc. advanced 49 cents, or 1.3%, to $37.21 among energy stocks.
Health-care stocks have gained, as Biovail added 5.5% to $14.89 and Cardiome gained 2.9% to $4.93.
Mining stocks were down, as First Quantum slid 4.5% to $72.12, Inmet lost 2.9% to $56.96 and HudBay was down 2.4% to $8.78.
In corporate news, Magna International said it may cut more than 10,000 jobs from Opel, nearly half of which would be in Germany. Last week, General Motors announced it will sell 55% of the unit to Magna and Russian lender Sberbank. Shares of Magna turned up 1.7% to $47.25.
Nortel Networks has agreed to sell its Enterprise Solutions division to Avaya for about $900 million.
Drug maker Patheon reported Monday a "disappointing" third-quarter as revenues plunged 15.7% due to due to setbacks at its Puerto Rico operations, a slowdown in its pharmaceutical development services and a drop in the U.S. dollar, among other factors. Its shares dipped 17 cents, or 5.7% to $2.82.
The Toronto-based company, which had been at the centre of a takeover battle, said its net loss for the quarter ended July 31 was $6 million, 10.6 cents per share, compared with a loss of $14 million, 15.4 cents per share, in the year-earlier period.
Among gold issues, shares in Rubicon Minerals Corp. ran ahead 28 cents or 7% to $4.28 after it released an update on drilling operations at its 100% owned Phoenix Gold project in the Red Lake Gold District of Ontario. It called recent activity to open up a new target area "one of our best holes drilled to date."
Eldorado Gold Corp. shares declined 46 cents, 3.6% to $12.39 as it said Monday the due diligence conditions in a $2-billion deal to buy the rest of Australia's Sino Gold Mining Ltd. have been satisfied. The deal is expected to close in early December and will allow Vancouver-based Eldorado to expand its presence in China, and will result in a gold producer with a combined stock market value of $6.4 billion.
Market heavyweight Potash Corp. weighed on the TSX, down 60 cents or 0.6% to $96.25 after Citigroup lowered its ratings on the Saskatchewan company to "'hold' from 'buy' because of the likelihood of limited opportunity for fertilizer application this fall and other concerns."
In economic news, Statistics Canada reported industrial capacity utilization dropped by 2.8 percentage points to 67.4% in the second quarter, a much smaller decline than the decrease of 5.2 percentage points in the first quarter.
The Canadian dollar slid 0.42 cents, to 92.30 cents U.S.
ON BAYSTREET
Of the 14 TSX subgroups, 11 were in positive territory, led higher by consumer discretionaries, up 1.4%, financials -- up only slightly less -- and utilities, which gained 1.2%.
The three laggards were materials, sagging 1%, gold, off a little bit less, and metals and mining stocks, down 0.9%.
The TSX Venture Exchange lost 8.36 points to 1,253.53, while the Nasdaq Canada index added 15.80 points to 807.83.
ON WALLSTREET
In New York, stocks turned higher Monday afternoon, late in a tumultuous session, as investors mulled China's trade rift with the U.S. and President Obama's speech ahead of the one-year anniversary of Lehman Brothers.
The Dow Jones Industrials gained back 21.39 points to 9,626.80. The S&P 500 index advanced 6.61 points to 1,049.34. The Nasdaq composite index tacked on 10.88 points, to 2,091.78.
Stocks took a breather Friday after a five-session winning streak that left the major gauges at the highest levels in nearly a year. But after that selloff, investors were cautious Monday.
Higher commodity prices have supported the most recent leg of the advance, boosting the underlying stocks. Gains in technology and financial shares added to the advance. But oil services, tech and financial shares all retreated Monday, limiting the market's movement.
The U.S. and China, its largest trading partner are facing a growing rift, even as the countries continue to collaborate as part of a global effort to tackle the economic slowdown.
Late Friday, President Obama, responding to complaints from labour unions, said the U.S. would impose tariffs of up to 35% on tires from China. On Sunday, China said it would begin the process of imposing tariffs on U.S. cars and chicken meat. On Monday, China asked the World Trade Organization to get involved.
The conflict precedes the Group of 20 meeting of leaders of the largest and fastest-growing economies in the U.S. next week.
Global markets tumbled. European markets slumped in afternoon trading, while Asian markets ended lower, with the Japanese Nikkei down more than 2%.
The trade spat and slide in global markets gave a boost to the U.S. dollar, which has been sliding versus other major currencies lately.
President Obama spoke Monday on Wall Street about financial services reform a day short of the one-year anniversary of the collapse of Lehman Brothers.
Obama said that the economy is returning to normal, but that it will take time. He also said Wall Street must take steps to rebuild its relationship with the public and make sure that it doesn't engage again in the kind of behavior that led to the crisis.
Tuesday is the anniversary of the collapse of Lehman Bros. and buyout of Merrill Lynch by Bank of America, events that were seen as turning a recession into a full-blown crisis on a level not seen since the 1930s.
On that day, the Dow plunged 504 points as financial shares tumbled, credit seized up and investors panicked. Stocks zigzagged through the week, but managed to end with just slim declines that Friday thanks to some government actions. They included the Fed jumping in to save AIG from bankruptcy and the establishment of an early version of the TARP bank bailout plan.
Eli Lilly said its cutting around 5,500 jobs as part of a bigger plan to save $1 billion U.S. by 2011.
Sprint shares rallied 11% on published reports that Deutsche Telekom, the owner of T-Mobile USA, is interesting in acquiring the U.S.-based phone carrier.
Among other movers, financial shares slipped, including Citigroup, Bank of America and Morgan Stanley.
Treasury prices plunged, correspondingly prodding the yield on the benchmark 10-year note up to 3.41% from Friday’s 3.34%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil was off 43 cents to $68.87 U.S.
Gold prices were off $5 at $1,001 U.S. an ounce.
