The Toronto stock market turned higher Tuesday afternoon and oil prices turned positive while investors shook off earlier worries about how slowing Chinese growth would impact on the global economic revival.
The S&P/TSX composite index gained 130.07 points, or 1.1%, by the final bell to 12,053.11
The Canadian dollar moved higher by 0.99 cents to 98.68 cents U.S.
Prices for oil and metals backed off as a reading of China’s rapid growth suggested it slowed slightly to a still-strong 9.1% during the third quarter, down from the previous quarter’s 9.5% and the lowest level in two years.
The government said that was in line with plans to steer growth that hit 10.3% last year to a more sustainable level and cool politically dangerous inflation.
However, a slowing Chinese economy is bad news for much of the rest of the world, which has counted on strong growth to help fuel a global economic recovery. On a brighter note, analysts noted that the Chinese data at least lessened fears that the country’s economy is heading for a hard landing.
Signs of faltering growth in China usually results in falling prices for commodities since strong demand from the world’s second-biggest economy has supported higher prices for oil and metals and in turn rising share prices on the resource-heavy TSX.
The base metal sector rose as the December copper contract on the New York Mercantile Exchange came back from early lows to move two cents lower to $3.36 U.S. a pound.
HudBay Minerals gained 48 cents to $10.99 while Ivanhoe Mines rose $1.13 cents to $18.28.
The energy sector gained ground as Suncor Energy gained 84 cents to $30.60 and Cenovus Energy prospered 48 cents to $36.03.
The industrials sector led advancers, amid rising railroad stocks. Canadian Pacific Railway up $2.64 to $56.08 and Canadian National Railways climbed $2.15 to $74.65.
In the gold sector, Barrick Gold Corp. shed 48 cents to $47.80 and Goldcorp Inc. stepped back 33 cents to $47.76.
In other corporate news, Research In Motion shares gained 69 cents to $23.59 as company unveiled a new operating system on Tuesday for its next-generation BlackBerry smartphones to better compete with Apple and Android devices. The new BlackBerry operating system is called BBX and it’s based on the operating system that’s already in the RIM’s PlayBook tablet.
Valeant Pharmaceuticals International Inc. said it has acquired nearly 81 million shares of Cold-FX maker Afexa Life Sciences, or nearly 74% of the Edmonton drug maker, under a friendly takeover offer. Valeant said it will extend its bid to Oct. 27 to acquire the rest of the shares. Valeant shares slipped 35 cents to $36.70.
Sprott Resource Corp. said it has begun a strategic review of its 81% owned subsidiary Waseca Energy Inc., an oil company operating in Western Canada. The review could lead to a sale of Waseca, which produces heavy oil in the Lloydminster area of Saskatchewan. Sprott shares were up eight cents to $4.13.
ON BAYSTREET
The TSX Venture Exchange grew 10.26 points to 1,551.75 while the Nasdaq Canada index shot up 10.40 points to 447.53
All but one of the 14 Toronto subgroups were positive to end the session. Metals and mining climbed 2.7%, while energy stocks tacked on 2.6%, and industrials were 2.5% to the good.
Only health-care stocks were sicker; they listed lower by 0.4%.
ON WALLSTREET
In New York, stocks gained ground Tuesday afternoon, with bank shares leading the way, as investors sorted through a mixed bag of earnings news.
The Dow Jones Industrials spiked 180.05 points, or 1.6%, to close at 11,577, as increases in Bank of America and JPMorgan Chase outshined IBM's 4% drop.
The S&P 500 strengthened 24.52 points to 1,225.38, while the Nasdaq Composite Index sprouted 42.51 points to 2,657.43.
Before the opening bell, Bank of America posted a profit of $6.2 billion U.S. in the third quarter, reversing a year-earlier loss. Late Monday, IBM's revenue fell short of forecasts, disappointing investors.
Other bank stocks also rallied, with shares of Citigroup, Morgan Stanley, and Wells Fargo all advancing. Shares of Goldman Sachs were also higher, even though the investment bank posted a worse-than-expected quarterly loss.
Shares of Dow components Johnson & Johnson and Coca-Cola were mixed although both beat analysts' forecasts on earnings.
Shares of Crocs sank after the shoemaker cut its guidance for the first time in three years amid weakening sales.
VMWare's stock rose as the company's third-quarter profit more than doubled from a year ago.
Apple, Intel and Yahoo will report results after the closing bell.
Europe's debt crisis continues to be the proverbial albatross around investors' necks. Stocks tumbled 2% Monday, as investors worried it may take longer than expected to reach a solution.
Also late Monday, Moody's Investor Services warned that France could be slapped with a negative outlook over the next three months. The rating agency kept its AAA rating on France, but cautioned that the country's finances are among the weakest of its peers that also enjoy a pristine rating.
Tuesday afternoon, Standard and Poor's downgraded more than a dozen Italian banks, and placed a negative outlook on another batch.
On the economic front, producer prices rose more than expected in September, the U.S. Labor Department reported. The Producer Price Index rose 0.8% during the month, after coming in flat in August. Economists had expected the PPI to rise only 0.2%.
The so-called core PPI, which strips out volatile food and energy prices, rose 0.2%, also slightly more than expected.
The price on the benchmark 10-year U.S. Treasury increased slightly, pushing the yield down to 2.15% from 2.16% late Monday. Treasury prices and yields move in opposite directions.
Oil for October delivery regained $2.18 to $88.50 U.S. a barrel.
Gold futures for December delivery fell $23.80 to settle at $1,652.80 U.S. an ounce.
