The Toronto stock market was higher Thursday amid positive U.S. economic news and a German vote in favour of a strengthened bailout fund to help European countries stuck in debt crises.
The S&P/TSX composite index jumped 100.45 points to 11,686.32
The Canadian dollar faded 0.28 cents to 96.49 cents U.S.
The TSX lost 235 points Wednesday while the Dow fell 180 points.
The TSX is still down almost 20% from its highs of early March amid fears that the global economy is slipping back into recession, which would lower demand for oil, copper, coal, wood and many of the resources Canada produces. That would weaken exports and profits and further depress share prices on the resource heavy TSX.
The European debt crisis has weighed heavily on markets recently over fears that Greece is on the brink of a default, which would send shock waves through the global economy, particularly in Europe, and wreak havoc on the continent’s banking sector.
The financial sector advanced on rising confidence that European leaders can find a lasting solution to the government debt crisis. Royal Bank advanced 88 cents to $48.41 and TD Bank gained $1.46 to $75.00.
The energy sector rose as Suncor Energy climbed 66 cents to $27.71 while Canadian Natural Resources gained 73 cents to $31.52.
Metal prices were stable with the December copper contract unchanged at $3.26 U.S. after closing Wednesday at its lowest level since August 2010. Copper is widely considered a proxy for the overall economy.
In the base metals component, First Quantum Minerals down 76 cents to $14.40 and Ivanhoe Mines fell 36 cents to $15.71.
Railroad stocks rose alongside mining companies as Canadian Pacific Railway rose $1.86 to $51.72.
Gold prices were little changed as Barrick Gold Corp. up 59 cents to $48.01.
In corporate news, ATS Automation Tooling Systems Inc. said Wednesday that its troubled solar-energy subsidiary Photowatt France will take a $24-million accounting hit in the current quarter as the result of terminating contracts with some of its suppliers.
ATS said current prices for silicon and wafers have fallen below what Photowatt France would have paid over the next six years under the contracts with its suppliers. ATS shares slipped six cents to $5.99.
Petrobank Energy and Resources Ltd. has suspended operations at its heavy oil recovery demonstration project in Conklin, Alta. The company said it is looking at whether to integrate the project into its wider May River operations or abandon it entirely. Petrobank shares fell $1.66 to $6.59.
Shares in junior miner Rio Alto Mining Ltd. lost 16 cents to $2.48 after the Vancouver-based company temporarily suspended mining activity at its La Arena gold mine near Lima, Peru as workers begin a strike.
The suspension of operations will hurt the company’s 2011 gold production, and Rio Alto will provide an updated guidance once production resumes.
Speaking economically, Statistics Canada reported this morning that its Industrial Product Price Index increased 0.5% from July to August, mostly due to motor vehicles and chemical products.
The agency also said the Raw Material Price Index slid 3.2% over the same period on lower fuel prices. What’s more, weekly non-farm payroll employee earnings moved up 0.1% in July over June to $872.70.
ON BAYSTREET
The TSX Venture Exchange flopped 20.46 to 1,482.22, while the Nasdaq Canada index subtracted 6.31 points to 426.76
All but two of the 14 Toronto subgroups were up on the day, most notably, financials, ahead 1.9%, while gold and telecom stocks gained 0.9% each.
The lone laggards Thursday were in metals and mining, slipping 1.7%, and health-care stocks, down 0.2%.
ON WALLSTREET
In New York, equities sold off Thursday afternoon, after a buoyant morning, as investors were reminded that the problems in both the United States and Europe are far from over.
Even so, the Dow Jones Industrials ended the day higher by 143.08 points, or 1.3%, to 11,154
The S&P 500 was positive 9.34 points to 1,160.40, while the Nasdaq sifted off 10.82 points to 2,480.76.
Investors took the latest jobless claims report, which showed initial unemployment claims at their lowest level since April, as a sign to jump back into the stock market.
U.S. stocks were already poised for a positive start after Germany's parliament approved new powers for the euro-zone's bailout fund. Europe's debt crisis has kept investors on edge for months.
Investors stayed in financial stocks, which were among Thursday's biggest winners. Morgan Stanley, JPMorgan Chase, Bank of America, Goldman Sachs, and Citigroup were all up between 0.5% and 5% in the afternoon.
Tech stocks were the laggards, led by a 12% drop in Netflix. The company has incensed subscribers by raising prices to offset its costs. And its latest move to rebrand its DVD-by-mail service has met with a lukewarm reception at best. In fact, Netflix's stock has dropped nearly 50% in the past month alone.
Shares of Nokia jumped after the phone maker said it will cut another 3,500 jobs in 2012 to reduce costs.
AMD shares fell sharply after the chipmaker cautioned investors it forecasts slower revenue growth in the third quarter than originally expected.
General Motors' shares rose after ratings firm Standard & Poor's raised the automaker's credit rating to BB+ from BB-.
Economically speaking, the U.S. economy grew at a 1.3% annual rate in the second quarter, more quickly than expected, according to GDP, the broadest measure of the nation's economic activity. GDP jumped from the previous reading of a 1% rise.
Meanwhile, the number of Americans filing for unemployment benefits last week dropped by 37,000 to 391,000. That reading came in much better than the 419,000 claims economists had predicted.
Elsewhere, a report from the National Association of Realtors showed pending home sales down 1.2% in August
The price on the benchmark 10-year U.S. Treasury gained ground, pushing the yield down to 1.96% from Wednesday’s 2.00%. Treasury prices and yields move in opposite directions.
Oil for October delivery gained $1.21 to $82.42 U.S. a barrel.
Gold futures for December delivery fell $6.50 to $1,612.40 U.S. an ounce.
