The Toronto stock market staged a comeback Monday, after a wild week that saw global markets plummet on downbeat predictions for the U.S. economy and a growing mess in debt-laden European countries.
Commodity stocks led weakness on the resource-heavy TSX as prices for oil and copper continue to fall amid expectations for worsening global economic conditions, which affect demand. Prices have also been pushed lower by a rising U.S. dollar as investors continue to shed risk and buy into the safe haven status of U.S. Treasury bonds.
The S&P/TSX Composite shot higher Monday by 244.15 points, or 2.1%, to 11,707.02
The Canadian dollar was up 0.11 of a cent to 97.25 cents U.S.
Mining stocks recovered from big losses, as Teck Resources picked up 29 cents to $31.02 while First Quantum Minerals prospered $1.24 to $14.95.
The gold sector also gained strength, as Goldcorp Inc. gained 47 cents to $47.42.
The energy sector flexed muscle, as Cenovus Energy regained 75 cents to $31.99 while Suncor Energy climbed $1.19 to $27.51.
In corporate news, SSQ Financial Group will purchase the Canadian AXA Life Insurance operations from Intact Financial Corp. for $300 million. The division will be renamed as SSQ Insurance Inc. and become a unit of SSQ. Intact shares were up $2.36 to $56.16.
Valeant Pharmaceuticals International Inc. is raising its offer for Afexa Life Sciences Inc. to about $78 million or 85 cents a share in the escalating battle for the Cold-FX maker. It said that’s a 20% premium from its earlier offer.
The announcement comes after Paladin Labs Inc. boosted its offer for Afexa to $74.5 million, or 81 cents per share, on Sunday. Valeant shares jumped 71 cents to $40.07, while Afexa shares gained 11 cents to 86 cents and Paladin shares were 60 cents higher to $37.96.
Detour Gold Corp. said Monday it has agreed to buy Trade Winds Ventures Inc., its neighbour and a partner in the Detour Lake area of northeastern Ontario, for $84 million in a cash-and-shares deal. Detour shares declined $1.03 to $30.99.
ON BAYSTREET
The TSX Venture Exchange fell 18.93 to 1,527.15, while the Nasdaq Canada index gained 5.27 points to 435.13
All but one of the 14 Toronto subgroups were up on the day, led by financials and energy stocks, up 2.4%, while global base metals prospered 2%.
Only telecoms held out against the positive tide, dropping 0.4%.
ON WALLSTREET
In New York, stocks advanced in choppy trading Monday afternoon, as jittery investors hoped that Europe's debt crisis was headed on the right path... toward resolution.
The Dow Jones Industrials raced ahead 272.38 points, or 2.5%, to close at 11,043.90
The S&P 500 also moved up 26.52 points to 1,162.95, while the Nasdaq strengthened 33.46 points to 2,516.69
Financial stocks were among the best performers. JPMorgan Chase was one of the biggest winners on the Dow, while shares of Citigroup, Wells Fargo, Goldman Sachs and Bank of America also carved out solid gains.
Shares of Warren Buffet's Berkshire Hathaway led the gains in the S&P 500 after the company announced a buyback of class A and B shares at a premium of no more than 10% of the shares' book value.
Boeing's stock popped as the aircraft maker delivers the first 787 Dreamliner to Japan's All Nippon Airways.
Shares of Netflix were also higher following news that the video-streaming company had inked a deal with DreamWorks over the weekend.
UBS shares gained slightly as investors reacted to the company's management shift. The chief executive of UBS Group resigned Saturday in the wake of a staggering $2.3-billion U.S. loss on unauthorized trades at the Swiss bank.
Over the weekend, European finance officials met in Washington, D.C., for the annual meeting of the World Bank and International Monetary Fund.
Greek Finance Minister Evangelos Venizelos said late Sunday that his country would do "whatever it takes" to solve its debt crisis. His comments came a day after U.S. Treasury Secretary Tim Geithner warned that the sovereign debt and banking crisis in Europe represents "the most serious risk now confronting the world economy."
Investors are concerned that a Greek default will drag down other European economies struggling with weak growth and unsustainable levels of debt, and could quickly spread financial woes across borders and oceans.
But investors were also heartened by talk that the European Central Bank may cut interest rates at its next policy meeting on Oct. 8. The ECB has raised rates twice this year in an effort to combat inflation so if the central bank reverses course, that could signal a slightly healthier economy and that's giving investors some early optimism.
U.S. stocks closed out last week with a slight rally on Friday, but the Dow still logged its worst week since October 2008. All three indexes fell by more than 5% for the week.
A raft of bad news from around the globe last week, including reports of manufacturing slowdowns in China and Europe and a dour economic outlook from the U.S. Federal Reserve, kept investors worldwide in a state of heightened fear.
Economically speaking, new U.S. home sales fell 2.3% in August to an annual rate of 295,000, the government said. That was slightly better than the 293,000 annual rate that economists had predicted.
The price on the benchmark 10-year U.S. Treasury decreased, pushing the yield up to 1.90% from 1.81% late Friday. Treasury prices and yields move in opposite directions.
Oil for October delivery regained $1.13 to $80.98 U.S. a barrel.
Gold futures for December delivery fell $39 to $1,600.80 U.S. an ounce.
