The Toronto stock market racked up a solid gain Tuesday afternoon amid rising commodity prices after aluminum giant Alcoa Inc. encouraged investors with an earnings report that beat expectations and a positive outlook.
The S&P TSX Composite Index climbed 107.08 points to close the day at 11,672.84.
The base metals sector improved with the September copper contract unchanged at $3.02. Teck Resources advanced 60 cents to $35.03 while Western Coal Corp. was up five cents to $4.20.
Ivanhoe Mines Ltd. said it has notified its joint-venture partner Rio Tinto of its plan to terminate a covenant that restricted its ability to issue shares to strategic investors. Andrew Harding, chief executive of Rio Tinto’s copper division, has resigned from Ivanhoe’s board of directors. Ivanhoe shares jumped $2.02 or 13.5% to $16.95.
The tech sector was up, ahead of an earnings report after the close from chip giant Intel. Research In Motion gained $1.93 to $57.76.
Oil prices climbed back above $75 U.S. a barrel as the positive start to the earnings season boosted confidence in the U.S. economy.
Prices also got a lift from a report from the International Energy Agency, which predicted that oil demand would rise next year on economic growth in developing countries. It said that global daily oil demand should rise by 1.3 million barrels to 87.8 million barrels a day in 2011, a rise of 1.6% on 2010.
Encana spinoff Cenovus Energy rose 67 cents to $30.23 while Imperial Oil climbed 62 cents to $39.32.
Meanwhile, the gold sector listed lower, though Kinross Gold Corp. was up seven cents to $16.82, while Goldcorp Inc. slid 17 cents to $43.24.
Financials were also supportive with Scotiabank ahead $1.31 to $51.91.
Shares in Royal Bank were 48 cents higher to $54.84 after the bank’s CEO, Gordon Nixon, said the bank plans to expand its corporate and investment banking and wealth management units in Britain. Nixon made the remark at a conference organized by the British Bankers’ Association.
In corporate news, Alamos Gold Inc. said that output at its Mulatos mine in Mexico was down as much as nine per cent in the second quarter due to a drought and other operational factors.
Alamos says it’s in line to meet the lower end of its 2010 production guidance of 160,000 to 175,000 ounces of gold and its shares declined 73 cents to $14.58.
One of Canada’s largest pension fund managers still plans to vote against a plan by auto parts giant Magna International to pay founder Frank Stronach more than $1 billion to give up control of the company. The Ontario Teachers Pension Plan Board says the payments to Stronach are excessive and unfair to the company’s other shareholders.
Even so, Magna shares were up $3.01 to $73.98.
Convenience store operator Alimentation Couche-Tard reported fourth-quarter profit of $68.8 million U.S. as it benefited from higher margins on fuel sold at its retail outlets and proceeds from the opportunistic sale of stock in Casey’s General Stores. Alimentation has been trying to acquire Casey’s.
The Montreal-area company’s stock rose $1.60 to $20.85.
In economic news, Statistics Canada said merchandise exports rose 5.2% in May, largely helped by improved volumes in automotive products.
Exports rose to $34.5 billion in May from $32.8 billion in April and imports rose to $35.0 billion in May from $33.1 billion in April. Meanwhile, the agency said that the country's trade deficit widened to $503 million in May from $330 million in April.
The Canadian dollar was 0.37 cents higher at 96.79 cents U.S.
ON BAYSTREET
All but one of the 14 TSX subgroups were higher on the day. Metals and mining zoomed 3.2% higher, with information technology up 2.4%, and global base metals ahead 2%.
Gold proved the lone laggard, down 0.2%.
The TSX Venture Exchange gained 13.98 points to 1,384.11 while the Nasdaq Canada index was 18.78 points better at 642.34
ON WALLSTREET
In New York, stocks surged Tuesday as investors welcomed Alcoa's better-than-expected profit report and a well-received auction of Greek debt lifted global markets and strengthened the euro.
The Dow Jones industrial average gained 146.75 points, or 1.4%, to close at 10,363.02
The S&P 500 index stepped forward 16.59 points to 1,095.34. The Nasdaq composite index added 43.67 points to 2,242.03
After the closing bell Monday, aluminum giant Alcoa reported higher quarterly sales and earnings that topped estimates, beginning the quarterly reporting period on a positive note. The Dow component also said aluminum demand would rise by 12% this year versus the previous forecast for a rise of 10%.
Profits are expected to have risen about 27% in the second quarter versus a year ago, while revenue is expected to have jumped 9%. But investors will focus more on what companies say about the second half of the year.
Investors are hoping to see that corporate profits have held up despite recent worries about the pace of the economic recovery and the European debt crisis. Those worries sent the major gauges down over 15% in two months.
But in the last week stocks have rebounded, with the major gauges jumping 5% to post the biggest weekly gains in a year. Stocks were mixed Monday, before resuming the rally Tuesday.
But experts cautioned that there are still negatives lurking, including the impact of financial reform, worries about debt and the weakness in the housing and labour markets.
Also after the close Monday, railroad operator CSX reported higher-than-expected quarterly sales and earnings, sending shares up 1% Tuesday.
Four other Dow companies report this week: Intel on Tuesday, JPMorgan Chase on Thursday and General Electric and Bank of America on Friday. Also on tap: Google on Thursday and Citigroup on Friday.
Shares of the troubled insurance giant surged about 6% after reports said the AIG board plans to meet on Wednesday to discuss a public offering of its Asian life insurance division, AIA.
A sale or public offering of that unit is a crucial part of AIG's strategy to raise funds by divesting divisions of its company to pay back the $102 billion U.S. it owes American taxpayers.
Moody's cut Portugal's debt rating two notches to A1 with a stable outlook. The rating is still investment grade, however, the agency says it expects the country's outlook is "likely to remain relatively week."
Last month, news that a ratings agency had cut its rating on one of the so-called PIIGS -- Portugal, Italy, Ireland, Greece and Spain -- would have sent stocks lower.
But investors seemed willing to shrug off Portugal's downgrade, after Greece staged a successful auction of its government debt, raising about $2 billion U.S. to repay the country's debt.
Economically speaking, the trade balance widened to $42.3 billion U.S. in May from $40.3 billion U.S. in April, surprising economists who thought it would narrow to $39.5 billion U.S., according to Briefing.com forecasts.
Elsewhere, the U.S. government ran up a budget deficit of $68 billion U.S. in June, the Treasury Department announced Tuesday. That was slightly lower than the $70-billion U.S. loss analysts had predicted, according to Briefing.com forecasts.
Treasury prices fell, raising yields on the 10-year note to 3.11% from Monday’s 3.05%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil moved higher by $2.27 to $77.22 U.S.
Gold prices picked up $12 to $1,212 U.S. an ounce.
