Canadian stocks have moved moderately higher again on Wednesday, led by Research in Motion and the technology sector. The daily gain is the third straight for the market amid hopes of an economic recovery.
Shortly before Wednesday’s closing bell, the S&P TSX Composite index was higher by 89.73 points to 11,337.70.
Air Canada plunged 18.5% to $1.50 after the airline announced a bought deal of 160.5 million shares at $1.62 per unit in an effort to raise $260 million.
Technology stocks were up, as Research in Motion added 1.4% to $71.30 after the Blackberry-maker's stock was initiated at "buy" at both Jesup & Lamont and MKM Partners.
Mining stocks were up, led by a 3% jump for HudBay, which finished at $13.71. Inmet gained 1.4% at $61.22 and Teck Resources was up 1.5% to $30.21.
Gammon Gold lost 5.3% to $9.38 said it entered into a bought deal to sell 11.24 million common shares at a price of $8.90 U.S. per share for gross proceeds of $100.04 million U.S. The stock was also downgraded to "reduce" from hold at Toronto-Dominion.
Epcor Power lost 2.7% to $14.60 after the stock announced its current financial expectations for 2009 are approximately 5% lower than its previous guidance.
Ciena Corp. said it has signed a deal to acquire substantially all of the optical networking and carrier Ethernet assets of Nortel Networks Corp.'s Metro Ethernet Networks business for $390 million in cash and 10 million shares of Ciena stock.
Maxim Power Corp. was up 11.5% to $3.40 after the company announced that it has entered into an arrangement agreement to amalgamate with EarthFirst Canada through a plan of arrangement. Maxim anticipates investing $5 million plus closing costs to consummate the arrangement.
Traders also looked ahead to some key Canadian economic news. Housing starts data for August is due on Thursday and employment data will be be released on Friday.
The Canadian dollar turned back 0.27 cents to 94.06 cents U.S.
ON BAYSTREET
All but two of the 14 TSX subgroups finished higher. Information technology was up 2.1%, global base metals only slightly less than that, while metals and mining stocks were ahead 1.6%.
The two losing groups were health-care stocks, off 0.2%, and telecoms, down a mere 0.01%.
The TSX Venture Exchange gained 7.43 points to 1,288.83, while the Nasdaq Canada index was up 7.18 points to 712.17.
ON WALLSTREET
In New York, stocks slipped Wednesday afternoon, with blue chips the biggest losers as a two-day advance lost steam amid a mixed dollar, lower oil prices and some jitters ahead of the start of the quarterly financial reporting period.
The Dow Jones Industrials had slid 5.67 points by day’s end to 9,725.58. The S&P 500 index had moved northward 2.86 points to 1,053.31. The Nasdaq composite index added 6.76 points to 2,110.33.
Boeing, United Technologies, 3M and Chevron were among the biggest decliners on the blue-chip average. They were also among the biggest gainers in the early-week rally.
Stocks have risen for the last two sessions, with the broad S&P 500 gaining just short of 3%, recovering most of what it lost in the last two weeks. The sharp advance was typical of the seven-month-old rally, in which investors have used small selloffs as an opportunity to jump back into stocks.
But the rally ran into some resistance Wednesday as the dollar turned mixed and investors looked to the start of the third-quarter financial reporting period.
Investors are aware that October has historically been a tough month, say some experts, citing the 1929 and 1997 crashes and major selloffs in the late '70s. But it can also be a positive month, particularly when it follows a strong September, like it did this year.
Besides, 2009 has been a year that has consistently defied historical trends.
Since bottoming at a 12-year low on March 9, the S&P 500 has gained 56%, and the Dow has gained 49% as of Tuesday's close. After hitting a six-year low, the Nasdaq has gained nearly 68%.
Dow component Alcoa reports results after the close Wednesday, getting the quarterly reporting period under way as per usual. The aluminum maker is expected to report a loss of 12 cents U.S. per share versus a profit of 37 cents U.S. a year ago.
Alcoa's expected loss is indicative of a weak materials sector, which is expected to post a 68% decline in profits from a year ago, according to Thomson Reuters' estimates.
The energy sector is expected to report that profits fell 64% from a year ago. Industrials are expected to post a 45% drop in profits.
Financials are expected to post the best results, due to easy comparisons against an abysmal third quarter of 2008. The sector is expected to see earnings growth of 59%.
Broad S&P 500 earnings are expected to have fallen 25% from a year ago, extending the losing streak to nine straight quarters, the worst since Thomson began tracking results a decade ago.
Treasury prices jumped, lowering the yield on the benchmark 10-year note to 3.17% from Tuesday’s 3.26%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil stumbled $1.31 to $69.82 U.S.
Gold prices picked up five dollars to $1,044 U.S. an ounce.
