The Toronto stock market advanced Monday afternoon on rising investor hopes that the U.S. Federal Reserve will take further steps to stimulate the flagging U.S. economic revival.
The S&P TSX Composite Index ended the day ahead 63.59 points to 11,863.56
The Fed started its scheduled two-day meeting on interest rates on Monday. The U.S. central bank will likely keep interest rates at historic lows when it makes it decision public at mid-afternoon Tuesday. But there are hopes that last Friday’s weak employment report for July could persuade it to restart some stimulus programs.
The TSX tech sector was a big percentage gainer. Research in Motion was up $2.38 at $57.31 following reports that the maker of the BlackBerry has reached a preliminary agreement with Saudi Arabia that would allow the government some access to user data. Under the reported terms, which have not been confirmed by the company, RIM would place one or more local servers within Saudi Arabia.
Several countries, including the United Arab Emirates, Indonesia, India, Lebanon and Algeria, have all expressed concern recently over their inability to monitor BlackBerry traffic. The uncertainty drove RIM’s stock price down about 7% last week.
TSX strength also came from the base metals sector, as the September copper contract on the New York Mercantile Exchange was ahead a penny at $3.36 U.S. a pound. Quadra FNX Mining added six cents to $12.71.
A strike halted production at Teck Resources’ operations at its Coal Mountain mine in southeastern British Columbia over the weekend. Coal Mountain, which represents more than 10% of Teck’s annual coal production forecast for this year, produces both metallurgical coal used in steel making and thermal coal used for power generation.
Teck shares were ahead 85 cents at $36.44.
Shares in Uranium One climbed 25 cents, or 8.8%, to $3.09. The miner increased its 2010 production guidance after record production at its South Inkai mine in Kazakhstan dramatically reduced its adjusted net losses in the second quarter. Its net loss came in at $1.3 million U.S., down from $12.9 million a year ago.
The telecom sector also provided lift with Telus Corp. ahead 98 cents at $42.18.
The TSX energy sector rose as Canadian Natural Resources climbed 39 cents to $36.83.
Financials were also mainly positive with Royal Bank ahead 68 cents at $53.66.
Manulife Financial ended two days of steep losses that followed a surprise announcement of a $2.4-billion quarterly loss which sent the insurers’ stock tumbling 14%. On Monday, MFC shares rose 21 cents, or 1.5%, to $14.24.
The gold sector was down, as Goldcorp Inc. declined 32 cents to $41.29.
In other corporate news, Arkansas-based Simmons Pet Food Inc. has agreed to pay $239 million to acquire Menu Foods Income Fund, a Toronto-area company involved in a massive recall of pet food three years ago. Menu Foods units soared $1.44, or 44.04%, to $4.71.
The Canadian dollar gained 0.08 cents to 97.36 cents U.S.
ON BAYSTREET
All but three of the 14 TSX subgroups were higher Monday, with real-estate the most solid, gaining 1.7%, while information technology and health-care issues garnered 1.3% each.
The three losing groups were utilities, off 0.3%, gold, down 0.07% and consumer staples, down 0.03%.
The TSX Venture Exchange was positive 3.55 points to 1,469.03 while the Nasdaq Canada index grew 13.37 points to 647.38
ON WALLSTREET
In New York, stocks rose Monday as investors signaled modest optimism in the economic recovery ahead of a highly anticipated statement from the Federal Reserve.
The Dow Jones industrial average moved 45.19 points higher, to 10,698.75
The S&P 500 index gained 6.15 points to 1,127.79, while the tech-rich Nasdaq composite index picked up 17.22 points to 2,305.69
Stocks were getting a boost from expectations that the Fed would strike a more dovish tone after its meeting Tuesday.
But trading remained quiet as the summer doldrums kicked in. August is historically a down month for the market with low trading volume and many market participants staying on the sidelines.
Wall Street ended last week on a negative note, after the government said the economy lost 131,000 jobs last month. But all three major indexes managed to eke out gains for the week.
With no major economic reports on Monday, investors were already looking toward Tuesday's Federal Reserve meeting on interest rates.
The central bank is widely expected to hold interest rates at historic lows near 0%, a policy that has been in place since December 2008. Investors are eager to see what additional steps the Fed is willing to take to help support the economic recovery, which is turning out to be weaker than many analysts had expected earlier this year.
HP shares fell Friday after chief Mark Hurd resigned in the wake of a harassment claim was made against him and the company. In late trade Monday, shares were off by 7.2%.
Apple confirmed over the weekend that Mark Papermaster, the former IBM executive in charge of the iPhone division, has been replaced by Bob Mansfield. Shares were flat Monday.
Skype, the Internet calling service, announced early Monday that it had filed for a $100-million U.S. initial public offering. Skype separated from eBay in September 2009.
Goldman Sachs lost more than $100 million U.S. on three separate days during the April to June quarter, according to documents the Wall Street giant filed with the Securities and Exchange Commission, after posting a remarkable "perfect" quarter in the previous three months. But shares stayed flat Monday.
Chrysler said Monday that its net loss was $172 million U.S. in the second quarter, but the company expects to raise guidance for 2010.
Google and Verizon unveiled a joint proposal for an open Internet standard known as "Net neutrality" on Monday. The proposal would give the Federal Communications Commission authority to regulate wired broadband Internet providers to ensure consumers have access to all legal content and applications on the Internet.
Treasury prices crept up, raising yields for the benchmark 10-year note to 2.82% from Friday’s 2.83%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil was 81 cents higher to $81.51 U.S.
Gold prices lost two dollars to $1,203 U.S. an ounce.
