Stocks on Bay Street traded higher Tuesday -- rebounding from yesterday -- as investors
brushed off negative US economic news while the price of oil turned negative amid weakening demand.
The S&P/TSX composite index ended up 62.38 points to 8,311.91.
In corporate news -- Iamgold Corp. said it agreed to take a 6.5 percent stake in Merrex Gold Inc. for $1.5 million to expand its production base in West Africa. This deal will help the gold miner earn a 50 percent interest in Merrex-owned Siribaya Gold project in Mali, West Africa, by spending $10.5 million over four years.
Also -- shareholders of U.S. oil drilling company Grey Wolf Inc. voted on Tuesday to approve a cash and stock takeover by Canada's Precision Drilling Trust.
On the data front -- resales of U.S. single-family homes and condos dropped 8.6 percent in November to a seasonally adjusted annual rate of 4.49 million, the National Association of Realtors reported Tuesday. Resales are down 10.6 percent in the past year. Economists surveyed had expected sales to fall to an annual rate of 4.9 million.
U.S. real GDP for the third quarter fell at a 0.5 percent annualized rate, unrevised from the previous estimate, the Commerce Department said. The contraction was in line with economists' expectations.
In Canada -- the Conference Board of Canada said confidence fell for its third consecutive month and dropped the confidence index 3.3 points to 67.7, lower than during the 1991 recession and the lowest since 1982.
The Canadian dollar, meanwhile, dipped 0.15 cents to 82.02 cents US.
BAYSTREET
Six of the TSX sub-groups traded higher today -- gold stocks gained 3.47 percent followed by a 1.27 percent rise in energy issues and a 0.90 percent climb in telecom stocks.
Gold futures also fell, with the spot month closing down $9.1 to finish at $838.10 US an ounce.
On the downside -- health-care stocks were off 2.45 percent; consumer staples issues shed 1.10 percent and real-estate stocks shed 0.75 percent.
Meanwhile, the TSX Venture Exchange was ahead 6.29 points to 698.31 and the NASDAQ Canada was up 2.16 points at 431.21.
ON WALLSTREET
U.S. stocks declined on Tuesday for a second session this week as worries intensified that federal funds might not salvage the auto industry, and economic reports illustrated the economy's decline and ongoing trouble in the housing market.
The Dow Jones Industrial Average sank 100.28 points, or 1.2 percent, to 8419.49, and the S&P 500 lost 8.47 points, or 1 percent, to 863.16. The Nasdaq slipped 10.81 points, or 0.7 percent, to 1521.54.
Shares of CIT Group Inc. gained 1.9 percent after the commercial-finance company said it had preliminary approval for an investment of about $2.33 billion as part of the Treasury Department's Troubled Assets Relief Program.
American Express said Tuesday it received preliminary approval from the Treasury Department to obtain $3.39 billion in TARP capital in exchange for preferred stock and warrants to purchase shares of common stock.
Discussions between Walt Disney Co. and Hong Kong officials are under way over the possible expansion of Hong Kong Disneyland, which may include adding attractions that would be unique to the Hong Kong venue, The Wall Street Journal reported.
Standard & Poor's and Moody's lowered credit ratings for automakers late Monday. Moody's downgraded the Corporate Family rating of Ford to Caa3 from Caa1, and lowered the senior unsecured rating of Ford Motor Credit, the captive finance arm of Ford Motor, to Caa1 from B3.
Meanwhile, S&P lowered the corporate credit rating on Chrysler to CC from CCC+.
The downgrades come a week after President Bush said the U.S. government would extend $13.4 billion in loans to automakers GM and Chrysler in December and January through the Troubled Asset Relief Program, with another $4 billion available in February.
Longer-dated U.S. Treasury securities were recently mixed. The 10-year was recently flat to yield 2.2 percent, and the 30-year was down 13/32, yielding 2.6 percent. The American dollar was recently stronger against the euro and yen and weaker against the pound.
Crude futures fell, furthering a 6 percent slump in the previous session, as gloomy economic news fueled worries of weaker energy demand. The contract for February delivery fell 93 cents to close at $38.98 US a barrel on the New York Mercantile Exchange.
