Stocks on Bay Street traded higher today -- as Citigroup's massive rescue package pushed investors off the sidelines despite news that Royal Bank will see Q4 results slipping 15 percent.
The S&P/TSX composite index was up 285.48 points to 8,440.87.
The Royal Bank of Canada says it expects fourth-quarter profits to come in at $1.1 billion, down 15 percent from a year earlier, the latest of Canada's big banks to report losses stemming from the shakeup in global financial markets. In a preview of its fourth-quarter earnings, Canada's largest bank said Monday it will book $360 million in one-time, after-tax charges.
BCE Inc. shares got a boost off the Citigroup arrangement on optimism that the $52-billion purchase of Canada's largest telecom company will go ahead. The bank is a lead lender in the transaction.
In other news -- Gran Tierra Energy shares fell after the company suspended production in two oil fields in southern Colombia due to a general strike in the region.
NovaGold Resources Inc. shares plummeted after the company said it's suspending operations at Rock Creek because it has been unable to raise new money and faces being unable to meet its financial obligations next month.
On the data front -- sales of existing homes fell in October, after a sharp increase in the previous month, as potential buyers remain sidelined by the weak economy. The National Association of Realtors reported Monday that sales by homeowners slid in October to an annual pace of 4.98 million. That was down 3.1 percent from September's revised reading of 5.14 million.
In Canada -- the Conference Board of Canada reported that its consumer confidence index fell again this month, losing 2.9 points to 71. The think-tank notes that consumer sentiment as at ''depths previously reached only in 1982 and 1990, which were both periods of recession.''
The Canadian dollar, meanwhile, was trading at 81.18 cents US, up by 2.28 cents from Friday.
BAYSTREET
Eight of the TSX sub-groups were traded higher today -- energy stocks gained 7.07; telecom issues ahead 4.97 percent and financial stocks gained 4.98 percent.
COMEX gold for January delivery rallied $27.80 to settle at $819.90 US an ounce.
On the downside -- tech stocks were down 3.46 percent followed by a 2.11 percent drop in utility issues and a 1.20 percent slump in consumer staples stocks.
Meanwhile, the TSX Venture Exchange moved up 18.62 points to 722.79 and NASDAQ Canada stocks rose 9.60 points to 445.
ON WALLSTREET
U.S. stocks Monday rallied for a second consecutive day after the government agreed to rescue Citigroup Inc. and as President-elect Barack Obama directed his new economic team to get to work.
The Dow Jones Industrial Average, which had earlier climbed as much as 552 points, ended the day with a gain of 396.97 points, or 4.9 percent, at 8443.39. The S&P 500 surged 51.78 points, or 6.5 percent, to 851.81. The Nasdaq gained 87.67 points, or 6.3 percent, at 1472.02.
On Friday, stocks fluctuated sharply throughout the day before staging a late rally that coincided with reports that President-elect Barack Obama would select New York Federal Reserve chief Tim Geithner to run the Treasury Department. Reports also indicated Monday that former Treasury Secretary Lawrence Summers would head the National Economic Council.
Over the weekend, the Treasury, the Fed and the Federal Deposit Insurance Corp. announced they would move to prop up Citigroup in part by investing $20 billion of the $700 billion Troubled Asset Relief Program in Citi shares. The large stake follows an earlier $25 billion TARP investment from the government. The government agencies also will guarantee against up to $306 billion in potential loan losses by the bank.
Bloomberg reported that General Motors, which along with Ford took large hits last week as they failed to secure a bailout from Congress, is trying to reduce its debt and delay a large payment to a union health fund. The report indicated that such a move is an effort to meet conditions that the automaker retool its business if it hopes to get government money.
In the merger arena, Johnson & Johnson announced it would buy Omrix Biopharma for $438 million, or $25 a share, in cash.
Longer-dated U.S. Treasury securities were falling in price. The 10-year was down 1-6/32, yielding 3.33 percent, and the 30-year was off 1-21/32 to yield 3.78 percent. The American dollar was weakening against the euro and pound but rising vs. the yen.
U.S. light crude oil for January delivery rose $4.57 to settle at $54.50 US a barrel on the New York Mercantile Exchange.
