Commodity stocks led the Toronto stock market to a solid gain Monday as a lower U.S. dollar and hopes for higher demand sent oil and metal prices up sharply.
The S&P/TSX Composite Index pulled higher by 72.35 points, to 12,029.72
The base metals sector improved as May copper rose 14 cents to $3.54 U.S. a pound with inventories sliding to the lowest levels since early January. On the TSX, Teck Resources gained $1.66 to $43.13 while FNX Mining rose a dime to $13.96.
The energy sector advanced as Suncor Energy climbed $1.08 to $31.93 and Canadian Natural Resources improved $1.59 to $73.48.
The gold sector was up, as Kinross Gold Inc. rose 18 cents to $17.65.
Financials were down as Royal Bank shed 34 cents to $59.48.
Both RBC and TD Bank said they were raising some of their mortgage rates, effective Tuesday. The biggest increase affects five-year mortgages -- both banks are hiking their posted rate by six-10ths of a percentage point to 5.85%. TD shares slipped 42 cents to $75.58.
The TSX moved higher Monday following a flat showing last week which had left the Toronto market ahead under two per cent for the first quarter, a performance unsurprising to many analysts.
Meanwhile, a new report from CIBC World Markets says that a hike in the Bank of Canada rate this summer should not derail the stock market. The report says stocks have historically outperformed bonds in the early months in the 13 interest rate tightening cycles studied by the investment firm.
CIBC chief economist Avery Shenfeld says hikes in interest rates tend to be more damaging later in the cycle, when the central bank is more willing to risk stalling the economy.
Domtar Corp. has agreed to sell its forest products business for $80 million plus additional working capital to EACOM Timber Corp. The Domtar forestry products division includes five operating sawmills in various regions. Domtar shares gained 66 cents to $66.14 while EACOM shares were ahead 14 cents at 97 cents.
Petrominerales Ltd. shares ran up $1.30 to $32.82 after it reported that initial production at the Candelilla-3 well in Colombia is a prolific 15,600 barrels of oil per day. That boosts total production at the Candelilla structure to 38,700 barrels per day and the company’s total production above 53,000 barrels per day. Shares jumped $2.58 in price to $34.10.
The Canadian dollar picked up 0.05 cents to 97.93 cents U.S.
ON BAYSTREET
Of the 14 TSX subgroups, all but one were higher on the day. Metals and mining remained the biggest gainer, at 2.6%, followed by energy, ahead 1.9%, and materials, up 0.9%.
Only a slide of 0.2% by financials kept things from being unanimous.
The TSX Venture Exchange prospered 12.45 points to 1,572.23. The Nasdaq Canada index surged 9.91 points to 813.45.
ON WALLSTREET
In New York, stocks gained Monday, pushing the Dow to its highest point in a year-and-a-half, after a report showing a rise in consumer spending added to bets about the strength of the economic recovery.
The Dow Jones industrial average added 45.50 points to 10,895.86, the highest point since Sept. 26, 2008, when it closed at 11,143.13. The S&P 500 index gained 6.63 points to 1,173.22, while the tech-rich Nasdaq tacked on 9.23 points to 2,404.36.
The first quarter ends Wednesday and currently the Dow is up 4%, the S&P 500 is up 4.6% and the Nasdaq is up 5.6%. One expert said that when stocks have had a positive quarter, end-of-quarter machinations tend to be positive, as managers look to play catchup.
Investors are also looking to get in ahead of a long weekend, with all financial markets closed Friday for Good Friday.
Stock gains were pretty broad based Monday, with 21 of 30 Dow components rising, led by Chevron and Exxon Mobil. Energy and other dollar-traded commodity stocks were rising as the greenback weakened versus the euro.
The euro has strengthened and global market have gotten a lift over the last few trading sessions as worries about Greece defaulting on its debt have waned. Last week, the European Union and the International Monetary Fund (IMF) agreed to a loan package that Greece or other nations could access, should the need arise.
On Monday, Greece said it was moving forward with plans to issue a new seven-year bond.
Stocks have risen in six of the last seven weeks as investors have begun to factor in a stronger economic recovery, following a rough period between mid-January and early February. During that stretch, the S&P 500 lost over 9% and the Dow and Nasdaq lost more than 7% as investors worried that global debt woes and increased U.S. regulation of banks and financial markets might constrain growth.
The Treasury Department said Monday that it is moving closer to selling its 27% stake in Citigroup, but didn't provide details about the timeline of any sale.
The government owns 7.7 million Citigroup shares, having acquired a controlling interest in the company after providing a $45-billion U.S. bailout in fall 2008 amid the height of the credit crisis. Citigroup shares fell 3.5%.
Ford Motor sold Volvo cars to Chinese automaker Zhejiang Geely Holding Group for $1.8 billion U.S., the companies said Sunday. The deal is the largest purchase in history by a Chinese car manufacturer, but falls short of the $6.4 billion U.S. Ford paid for Volvo in 1999.
Avnet will buy Bell Microproducts in an all-cash deal valued at $594 million U.S. including the assumption of debt. Avnet distributes electronic components and Bell distributes data storage and other computer component products
On the economic front, the U.S. Commerce Department reported that personal income was little changed in February, after an upwardly revised 0.3% gain in January.
The report was roughly in line with economists' expectations, according to a consensus forecast from Briefing.com.
Personal spending increased 0.3%, as expected, following a rise of 0.5% in January.
The price of the benchmark 10-year note slid, to raise the yield to 3.86% from Friday’s 3.85%.
Treasury prices and yields move in opposite directions.
The price of a barrel of oil shuttled ahead $2.42 to $82.42 U.S.
Gold prices moved seven dollars higher to $1,112 U.S.
