Mining and energy stocks led the way to a strong gain on the Toronto stock market Tuesday as U.S. dollar weakness and manufacturing data pushed oil and metals prices higher.
The S&P/TSX Composite Index sprinted ahead 116.56 points, or 1%, to 11,586.37, on top of last week’s 2.2% run-up amid a commitment by the European Union to stand beside Greece as the country deals with its debt crisis. European leaders on Monday said Greece will have another month to come up with a plan to cut its deficit.
The energy sector rose, as Suncor Energy was up 70 cents at $31.55.
The Deep Panuke natural gas project off Nova Scotia likely won’t be producing until the middle of 2011. A spokeswoman for Calgary-based EnCana Corp. said that drilling work is continuing but a delay in construction of the production facility, being built in the Middle East, has thrown the project off schedule. EnCana shares gained $1.00 to $34.68.
Among gold issues, Barrick Gold Corp. climbed 29 cents to $39.03 and Goldcorp Inc. was ahead 73 cents at $40.08.
The base metals sector advanced as March copper in New York climbed 14 cents to $3.22 U.S. a pound. Teck Resources advanced $1.17 to $39.04 while HudBay Minerals rose 31 cents to $13.51.
The TSX financial sector ticked higher after Finance Minister Jim Flaherty announced tighter rules for homebuyers because of concern Canadians may be taking on too much debt. One change would see borrowers required to meet the standards for getting a five-year fixed mortgage even if they are just opting for a cheaper, variable-rate instrument.
Bank of Montreal climbed 66 cents to $54.64.
The tech sector was down as Research In Motion Ltd. declined $1.95 to $73.35 even as the company launched a new BlackBerry web browser.
Illinois-based fertilizer producer CF Industries Holdings Inc. reported that it earned $51.4 million U.S. in the fourth quarter, down from $190.1 million a year ago. CF’s revenue was down 53% to $506.7 million.
Calgary-based rival Agrium Inc. has made a $5.2-billion hostile bid for CF. The offer expires Feb. 22. In New York, CF shares rose $3.46 to $103.96, while Agrium shares were up $1.19 to $68.79 on the TSX.
In other corporate developments, Rogers Communications Inc. said it plans to defend in court its Internet advertising claims of having the "fastest and most reliable" network in Atlantic Canada.
Regional telecom company Bell Aliant is asking a New Brunswick court to stop Rogers from making the claims about its high-speed Internet service. Bell Aliant says the claims are misleading, describing its own broadband Internet service at the most advanced and the fastest. Rogers shares were down 38 cents to $34.52 while Bell Aliant units gained 25 cents to $25.70.
In economic news, Statistics Canada said today that the country's factory sales increased 1.6% to $43 billion in December, mainly helped by a 4.4% rise in motor vehicle sales.
The Canadian dollar strengthened 0.46 cents to 95.78 cents U.S.
ON BAYSTREET
All but two of the 14 TSX subgroups finished the day higher. Global base metals leaped 2.3%, while energy stocks surged 2.2% and metals and mining gained 1.9%.
The two laggards were information technology, off 1.2% and telecoms, down 0.3%.
The TSX Venture Exchange hiked 21.39 points to 1,520.14, while the Nasdaq Canada index skidded 5.63 points to 750.18.
ON WALLSTREET
In New York, stocks rallied Tuesday as better-than-expected quarterly results from Merck and Barclays reassured investors, and the weaker dollar boosted commodity prices and shares.
The Dow Jones industrial average rocketed up 169.67 points, or 1.7%, to 10,268.81. The S&P 500 index boosted itself 19.36 points to 1,094.87, and the Nasdaq composite gained 30.66 points to 2,214.19.
U.S. markets were closed Monday for Presidents Day.
The stock advance was broad-based, with 28 of 30 Dow components rallying, led by Boeing United Technologies, Chevron, Exxon Mobil, 3M, Caterpillar and Procter & Gamble.
Dow component Merck also rose after its quarterly results. Dow financial companies gained too, including American Express and Bank of America, as part of a bigger run in the sector after British bank Barclays said profit more than doubled last year
Wall Street managed gains last week, after four weeks of declines, but the advance was tepid amid worries about China's plans to curb lending and the threat of Greece's debt crisis spreading. Those worries were set aside Tuesday as investors focused on some of the stocks that were hit in the recent selloff.
Landgraf said that there had been so much bad news over the last few weeks in terms of issues abroad that most people who were going to sell already did it. Since about the middle of last week, the tone has been better, with buyers starting to come back in at lower levels.
Between rally highs hit on Jan. 19 and the lows of early February, the S&P 500 fell more than 9% and the Dow and Nasdaq lost more than 7%.
A handful of influential companies report results this week, although the bulk of the reporting period has already passed.
Two Dow companies released results Tuesday morning.
Merck reported higher quarterly revenue that beat estimates on higher earnings that were in line with analysts' estimates. The drug maker said it won't issue 2010 guidance until April. Shares gained 1%.
Kraft Foods reported higher quarterly earnings that topped estimates on higher quarterly revenue that missed analysts' estimates.
The food maker said the sale of its frozen pizza business to Nestle will cut five cents U.S. per share from earnings annually, but its recent buy of British chocolate maker Cadbury will speed up long-term growth. Kraft shares fell 1.5%.
With 379 companies, or 76%, of the S&P 500 having reported, fourth-quarter earnings are on track to have risen 208% from a year earlier, according to Thomson Reuters. Revenues are set to rise 8%. Stripping out the buoyant financial sector, earnings are set to rise 16% and revenues 3%.
Treasury prices climbed, lowering the yield on the 10-year note to 3.66%, from 3.69% late Friday. Treasury prices and yields move in opposite directions.
The price of a barrel of oil leaped $3.00 to $77.13 U.S.
Gold prices galloped ahead $30 to $1,120 U.S.
