News that one of the top contenders to head the U.S. Federal Reserve has withdrawn his candidacy sent North American markets higher Monday, as investors bet that stimulus funding from the central bank will continue to flow a little longer.
The S&P/TSX composite index jumped 93.48 points to end Monday at 12,816.88
The Canadian dollar was down 0.08 cents to 96.85 cents U.S.
Economist Lawrence Summers had long been perceived as an opponent to the Fed's aggressive bond-buying program, which helped push down interest rates to spur lending and jump-start economic growth following the financial and economic crisis five years ago. The program, dubbed quantitative easing, has also weakened the dollar and boosted stock markets.
Summers' withdrawal to succeed current Fed chairman Ben Bernanke means Fed vice-chair Janet Yellen, believed to be a supporter of the stimulus program, may be next in line for the top job.
Meanwhile, oil prices declined, but gold prices got some lift after closing last week at their lowest price in more than a month.
December copper was up two cents at $3.23 U.S. a pound. Teck Resources worked higher 11 cents to $28.15.
Shares in Wi-Lan Inc. were up 6.8%, or 23 cents, to $3.62 after the company and Alcatel Lucent USA Inc. agreed to settle their dispute over several patents and withdraw litigation before U.S. district courts in Florida and Texas.
The gold sector declined, even as Barrick Gold gained 41 cents, or 2.2%, $18.75, while Goldcorp subsided 44 cents, or 1.6%, to $26.91
On the corporate front, Aimia Inc. announced it has reached an agreement with TD Bank Group and the Canadian Imperial Bank of Commerce for its popular Aeroplan loyalty credit card programs. Each bank will have rights to half the portfolio of accounts that offer their customers loyalty points, which can be exchanged for airline tickets and other goods through Aimia's flagship Aeroplan program.
Shares in Aimia rose 7.1%, or $1.18, to $17.81. TD shares were up 1%, or 91 cents, to $90.83, while shares in CIBC jumped 0.8% or 61 cents, to $81.74.
TD said it expects to acquire approximately 550,000 cardholder accounts from CIBC, representing approximately $3 billion in card balances and $20 billion in annual retail spending.
CIBC, which has been the primary Aeroplan credit card issuer for more than 20 years, will retain the half of the portfolio. That will include Aerogold customers with broader relationships with the bank.
Meanwhile, Bombardier flew the first test flight of its CSeries commercial aircraft Monday morning.
The flight sets off a year of testing, leading to delivery of the first aircraft, which seats 110- to 125-seat CS100 and is slated to enter into service in about a year. The heavily anticipated first flight had been delayed three times over nearly nine months. Its shares settled six cents, to $4.93.
On the economic slate this morning, Statistics Canada reported that foreigners bought more Canadian securities, adding $6.1 billion to their holdings in July, following a $15.4-billion divestment in June. Meanwhile, Canadian investment in foreign securities slowed to $0.9 billion and focused on bonds.
Also, figures released by the Canadian Real Estate Association showed home sales rose 2.8% from July to August. Actual activity came in 11.1% above levels in August 2012.
ON BAYSTREET
The TSX Venture Exchange backslid 2.09 points to 939.41
All but one of the 14 Toronto subgroups were higher throughout the day, with information technology chugging ahead 2.6%, real-estate took on 1.5%, and utilities improved 1.3%.
Only the gold sector kept things from being unanimous, ending the day duller by 0.1%.
ON WALLSTREET
The S&P 500 was once again close to a record high, as investors welcomed the withdrawal of Larry Summers from the race to become next chairman of the Federal Reserve.
The Dow Jones Industrials ballooned 118.72 points – off its highs of the day -- to conclude the session at 15,494.80
The S&P 500 index gained 9.70 points to 1,697.69. Earlier in the day, the broad index was just a handful of points below its all-time peak of 1,709 from early last month.
The NASDAQ ventured into the red 4.34 points to 3,717.85, as a drop in shares of Apple weighed on the tech-heavy index
Stocks continued to rally despite the fact that options trading was temporarily halted Monday afternoon at exchanges run by CBOE Holdings, NASDAQ OMX, BATS Global Markets and Miami International Holdings due to issues at the Options Price Reporting Authority, which provides trading data and price quotes.
While the halt didn't disrupt broader market trading, it's yet another black eye for the exchanges.
Housing stocks were among the biggest winners, with shares of Pulte Group, DR Horton, and Lennar all up sharply.
But even though the entire market was moving higher, Apple was a clear laggard. Shares were down nearly 3% as investors continued to punish the stock after analysts were disappointed by the new iPhone 5S and iPhone 5C.
On the economic front, manufacturing activity in New York unexpectedly slowed in September, according to report from the New York Federal Reserve. A separate report showed that industrial production rose the most in six months, although slightly slower pace than estimates, while capacity utilization grew in line with forecasts.
Prices for the 10-year U.S. Treasury were up slightly, lowering yields to 2.87% from Friday’s 2.90%. Treasury prices and yields move in opposite directions.
Oil prices dropped $1.84 to $106.37 U.S. a barrel.
Gold prices strengthened but 60 cents at $1,316.20 U.S. an ounce.
