Blue chips in Toronto shot higher on Wednesday -- led by a gain in gold stocks -- as investors brushed off Rio Tinto's decision to cut 14,000 jobs worldwide and focused in on reports that the US government approved a $14 billion bailout for the auto industry.
The S&P/TSX composite index was up 236.44 points to 8,634.
Australian mining company Rio Tinto said it will cut 14,000 jobs worldwide -- or 12.5 percent of its global workforce -- and cut its capital investment so as to save $1.6 billion a year by 2010. Shares rallied 18 percent.
In other news -- Nortel Networks shares fell 15 percent to 49 cents after the Wall Street Journal reported the telecom equipment company has hired legal counsel to explore bankruptcy court protection from creditors. Nortel responded that it is ''a viable partner for the long term'' and noted it has no debt maturity until 2011.
MDS disclosed its revenue and operating profit are below previous guidance, and it is taking a US$260-million writeoff of the MAPLE medical-isotope reactor, along with a goodwill writedown of as much as $370 million at its MDS Pharma Services division.
George Weston Ltd. is selling its fresh bread and baked goods business in the United States to Mexico's Grupo Bimbo for $2.5 billion US, the company announced Wednesday. The assets, being sold by Weston's Dunedin Holdings subsidiary, include the Arnold, Brownberry, Entenmann's, Freihofer, Stroehmann and Thomas' muffin and bagel brand names.
SNC-Lavalin says it has acquired Queformat Ltd., a 35 years-old Longueuil, Que. firm specializing in materials engineering, geotechnology and environmental sciences, and roofs and waterproofing. Financial terms of Wednesday's deal were not revealed.
On the data front -- Statistics Canada said labour productivity of Canadian businesses remained unchanged in the third quarter, extending the weakness that began in the second quarter of 2007.
Down south -- the Mortgage Bankers Association said Wednesday that U.S. mortgage applications a decreased a seasonally adjusted 7.1 percent for the week ended Dec. 5 compared with the final week of November.
Also -- the Commerce Department reported a 1.1 percent decline in wholesale inventories in October, wider than the 0.2 percent cutback predicted by economists and the biggest inventory decline by wholesalers since November 2001.
The Canadian dollar, meanwhile, was trading 0.07 cents higher at 79.40 cents US.
BAYSTREET
Nine of the TSX sub-groups traded higher today -- gold stocks were up 10.44 percent followed by a 8.48 percent gain in mining issues and 5.90 percent rise in energy stocks.
COMEX gold for February delivery jumped $34.60 to $808.80 US an ounce.
On the downside -- financial stocks fell 1.69 percent; tech issues shed 1.30 percent and telecom stocks dipped 0.64 percent.
Meanwhile, the TSX Venture Exchange rose 19.52 points to 705.54 and the NASDAQ Canada was off 0.42 points at 398.86.
ON WALLSTREET
U.S. stocks rose Wednesday, boosted by progress on a bailout of the U.S. auto industry, even as opposition to the plan from several Senate Republicans shaved earlier gains.
At the close the Dow Jones Industrial Average had gained 70 points to 8761. The Nasdaq had risen 18 to 1565, and the S&P 500 had tacked on 10 points to 899.
Congress and the White House have reached a deal on a $14 billion auto sector bailout that could bring a vote later Wednesday. The package would enable GM and Chrysler to avoid filing for bankruptcy through at least the end of March.
It is assumed that this would be sufficient time for the Obama administration and the new Congress to come up with a longer term solution for the ailing automakers.
Ford Motor is also eligible for part of the loan, but the company says it has enough cash to avoid bankruptcy for now and just wants access to the money as a backstop.
In other news -- American International Group owes several Wall Street firms roughly $10 billion after some of the insurer's investments failed to pan out, The Wall Street Journal reported, citing anonymous sources. AIG will receive a $150 billion aid package from the government, but that sum did not take into the account this loss.
Yahoo said it will begin handing out pink slips Wednesday. This is a follow-up to the company's announced plans back in October to reduce its workforce by 10 percent, or more than 1,400 workers.
Electronic Arts, the electronic gaming company, on Tuesday lowered its earnings guidance for fiscal year 2009 and also announced staff reductions. The company said it was cutting jobs to save costs, but did not specify the number of layoffs.
Treasury prices slumped, raising the yield on the benchmark 10-year note to 2.72 percent from 2.69 late Tuesday. The 10-year yield dipped below 3 percent last month for the first time since the note was first issued in 1962. Treasury prices and yields move in opposite directions.
U.S. light crude oil for January delivery rose $1.45 to settle at $43.52 US a barrel on the New York Mercantile Exchange following a mixed weekly crude inventories report.
The Department of Energy reported that U.S. crude oil inventories increased about 400,000 barrels in the week ended Dec. 5 over the week prior. ''At 320.8 million barrels, U.S. crude oil inventories are in the upper half of the average range for this time of year,'' the department said.
OPEC is scheduled to meet next week to evaluate the effectiveness of its earlier decision to cut production targets by 1.5 million barrels per day, and to weight the need for more cuts. Another OPEC production cut could help stabilize oil prices that have fallen with global economic hardships.
