The Toronto stock market started third-quarter trading Monday with a solid gain as investors belatedly reacted to a strong U.S. manufacturing report and higher oil and gold prices.
The S&P/TSX Composite Index progressed 85.62 points to close Monday at 13,386.49
The Canadian dollar slid 0.26 cents to 104.09 cents U.S.
American markets were shuttered for the July 4 holiday, but New York indexes ended last week with strong gains after the Institute for Supply Management reported its index for June showed that manufacturing activity unexpectedly picked up.
The ISM said its index came in at 55.3, up from 53.5 in May and stronger than the 52 reading that economists expected.
The report was particularly good news for investors who saw the TSX end the first half of the year down 1% year to date, partly because of concerns that the U.S. economy had hit a soft patch during the second quarter.
Investors have also been discouraged by the European government debt crisis and in particular fears that Greece could end up defaulting on its massive debt.
Sentiment last week was also lifted after Greek lawmakers backed austerity measures required from international creditors in return for more bailout cash.
But there were fresh concerns Monday after Standard & Poor’s warned that a recent French proposal to get banks involved in helping Greece would trigger a default on the country’s debt.
The S&P warning came a week after French banks said they were ready to help Greece by accepting a significant debt rollover. Germany’s banks later said they were also considering helping out on similar terms.
Among energy issues, Suncor Energy was ahead 79 cents to $38.59 while Canadian Natural Resources climbed 56 cents to $40.99.
The mining sector was up substantially while the September copper contract was ahead one cent at $4.31 U.S.a pound. Teck Resources improved by $2.29 to $51.31 while Thompson Creek Metals advanced 30 cents to $9.93.
The tech sector was also supportive with Research In Motion Ltd. ahead 42 cents to $28.30. RIM was part of a consortium of companies that paid a total of $4.5 billion in cash late last week for a portfolio of patents from Nortel Networks Corp.
The gold sector was flat even as Goldcorp Inc. was up 14 cents to $46.79.
On the corporate front, Bombardier Transportation declined Monday to confirm reports that it plans to announce up to 2,000 job losses among 3,000 workers employed at its rail car plant in Derby, central England.
Four of five rail contracts at the site will end by September and a consortium led by Bombardier recently lost a contract to supply 1,200 new Thameslink trains to rival Siemens. Bombardier shares dipped six cents to $6.89.
Shares of embattled forestry company Sino-Forest Corp. were up nearly 36% in trading Monday to $4.35, after a report that U.S. investment fund Wellington Management has taken an 11.5% stake in the company. Sino-Forest shares have been under siege since short seller Muddy Waters Research released a highly critical report on the company and accused it of exaggerating its assets and sales.
Shares in Toronto-based miner Romarco Minerals Inc. fell 11 cents to $1.53 after U.S. regulators ordered an environmental impact study on the company’s flagship Haile gold project in South Carolina.
Romarco said it has invested more than $4 million in environmental studies on the Haile development and is confident the project will have minimal environmental impact and will meet or surpass current regulations.
Canadian patent house Wi-LAN Inc. said Monday it has settled a lawsuit with Texas Instruments Inc. over Bluetooth technology for an undisclosed amount. Wi-LAN sued Texas Instruments in April 2010 as part of a broader series of suits against several of the world’s high-tech heavyweights over allegations of Bluetooth technology infringement. Its shares gained 68 cents to $8.46.
Economically speaking, Statistics Canada reported this morning that its Industrial Product Price Index (IPPI) edged down 0.2% between April and May, while the Raw Materials Price Index (RMPI) fell 5.2% over the same period. The major contributors to the declines were metals in the case of the IPPI and petroleum for the RMPI.
ON BAYSTREET
The TSX Venture Exchange gained 17.73 points to 1,921.91, while the Nasdaq Canada index moved forward 5.54 points to 560.03
In Toronto, all but two of the 14 subgroups surged. Metals and mining stocks led the way, up 2.4%, while energy issues gained 1% and material issues picked up 0.8%
The two laggards were consumer discretionaries, subsiding 0.2%, and gold, sliding 0.04%.
ON WALLSTREET
U.S. markets were closed for the Fourth of July. They will return to business Tuesday.
