The Toronto stock market was up sharply Tuesday as oil prices rose amid hopes for higher demand and the tech sector advanced on a report that BlackBerry maker Research In Motion Ltd. has new plans to compete with Apple Inc.
The S&P TSX Composite Index tacked on 240.20 points, or 2.1%, to 11,907.54
The American Petroleum Institute announces its weekly supply data late Tuesday while the U.S. Energy Department’s Energy Information Administration releases its report Wednesday. Analysts expect another drop of 1.8 million barrels in the U.S. supply, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
Oil traders have been encouraged in recent weeks by a fall in U.S. crude inventories, which suggests an economic recovery is raising demand.
Suncor Energy gained 97 cents to $34.48 while Canadian Natural Resources improved 75 cents to $38.02.
Meanwhile, the tech sector also moved higher with shares in Research in Motion Ltd. up $3.16, or 5.2%, to $64.49 after the Wall Street Journal reported that the company is planning a touch-screen smartphone with a slide-out keyboard and is experimenting with a tablet device.
Despite Tuesday’s sharp gain on the TSX and a climb of almost 1% last week, analysts think the positive feeling is likely to be short-lived.
Elsewhere on the TSX, the base metal sector was ahead as the July copper in New York gained two cents to $3.01 U.S. a pound, adding to five days of sharp gains, as data from China showing rising exports encourages demand prospects. Teck Resources advanced $1.40 to $36.50 while Western Coal Corp. rose 16 cents to $4.98.
The financial sector advanced as Scotiabank gained $1.19 to $51.40.
CIBC shares were ahead $2.31 to $75.00 after the bank announced late Monday it has signed a deal to buy a $2.1-billion credit card portfolio from Citigroup’s Canadian MasterCard business. The transaction makes the big bank Canada’s largest issuer of Visa and MasterCard credit cards.
Among gold issues, Barrick Gold Corp. was ahead 70 cents at $44.02 while Kinross Gold Corp. climbed 38 cents to $18.10.
Legacy Oil + Gas Inc. has acquired CanEra Resources Inc., a private oil company operating in the historic Turner alley oilfield in southwest Alberta. The friendly deal is worth more than $500 million.
Legacy said Tuesday it has paid $241 million in cash and 20.5 million shares, worth $262.2 million at the current stock price -- a total value of $503 million. Legacy shares fell 60 cents to $12.19.
In economic news, Statistics Canada said manufacturing sales advanced 0.2% to $44.50 billion in April, mainly on higher primary metals and petroleum and coal products.
Separately, the agency said labour productivity in Canadian businesses were up 0.7% in the first quarter 2010, after gaining 1.2% in the previous quarter. Economists were looking for productivity to increase 1.3%, following the 1.4% increase initially reported for the fourth quarter of 2009
The Canadian dollar grew 0.58 cents to 97.49 cents U.S.
ON BAYSTREET
All 14 TSX subgroups stayed higher throughout the day. Global base metals leaped 3.5%, metals and mining jumped 3.2%, while gold bounced 2.4% higher.
The TSX Venture Exchange advanced 8.73 points to 1,461.51, while the Nasdaq Canada index picked up 8.73 to 708.16
ON WALLSTREET
In New York, stocks surged Tuesday, pushing the Dow up over 200 points, as worries about Europe's debt woes hurting U.S. growth eased and the euro rallied.
The Dow Jones industrial average spiked 213.88 points, or 2.1%, to 10,404.77
The S&P 500 index gained 25.60 points to 1,115.23. The Nasdaq composite index moved up 61.92 points to 2,305.88
Stocks gained from the get go Tuesday, as strength in European markets and a rally in the euro reassured investors worried about how global growth will impact the U.S. Solid demand for government debt auctioned in Spain, Belgium and Ireland helped take the edge off euro-zone growth worries.
Stocks managed to surpass a key point in that range by the close, with the S&P 500 ending at 1,115, above the 200-day moving average. The Dow and Nasdaq were also at key technical milestones. Closing above these so-called "resistance levels" may put the market in a better position to extend the recent advance.
After falling for the better part of six weeks, stocks began to stabilize in the middle of last week. The advance continued through most of Monday after a report showed European industrial production surged in April, but stocks lost some steam in the afternoon after Moody's downgraded Greece's debt, reminding investors that Europe's crisis is alive and well.
The major indexes lost more than 12% each between the bull market rally highs of late April and last week's lows. But the selling could be deeper in the aftermath of a rally that pushed the S&P up 80% off the March 2009 lows.
All 30 Dow stocks rose, led by Boeing, Caterpillar, McDonald's, 3M, Microsoft and United Technologies.
Commodities stocks surged as the dollar fell, boosting dollar-traded commodity shares. The Oil Services Holders Trust ETF rallied 4% and the Deutsche Bank Energy index gained 3%.
Chip stocks rallied on reports that Taiwan Semiconductor Manufacturing and United Microelectronics Corp., two of the world's biggest chip makers, said global chip demand will grow in the second half of the year. Chip and chip gear makers rose, including Intel, Broadcom, Micron Technology and Applied Materials.
Boeing shares rose 4% after the company said it was increasing production on its popular narrow-body 737 planes for the second time in two months, citing improved demand in a recovering economy. Starting in 2012, the Dow component will produce 35 planes per month, rather than 34.
Manufacturer Illinois Tool Works boosted its second-quarter earnings forecast, saying it saw increased demand across a broad range of its customers in North America and beyond. Shares gained 1.6%.
News Corp shares rallied 8% in active Nasdaq trading as investors bet it will eventually win in its battle to take full control of BSkyB, the British satellite broadcaster. Earlier, BSkyB rejected News Corp's $12-billion U.S. bid to buy the 61% of the company that it doesn't already own, saying that the offer is too low.
Best Buy reported higher sales and earnings that missed expectations, as stronger sales of cell phones and computers were offset by weaker sales of music and movies. Best Buy shares fell 6%.
Executives from BP and four other major oil companies testified before a House committee in the wake of the spill that has ravaged the Gulf.
Comments from lawmakers were critical of the "cookie cutter" contingency plans of BP, Exxon Mobil, Chevron, ConocoPhilips and Shell Oil.
Earlier, Fitch downgraded BP's debt rating for the second time this month, leaving it at a level just above junk status.
Economically speaking, import prices fell 0.6%, the Labor Department reported, the lowest drop in nearly a year, with inflation likely to stay mild. Export prices also rose 0.6%.
The Empire manufacturing survey, a reading of manufacturing in the New York area, rose to 19.57 in May from 19.11 in April, missing forecasts for a rise to 20.0.
Treasury prices inched downward, raising the 10-year note's yield to 3.31% from 3.28% Monday. Bond prices and yields move in opposite directions
The price of a barrel of oil grew $1.83 to $76.95 U.S.
Gold prices inched ahead two dollars to $1,237 U.S. an ounce
