The Toronto stock market turned sharply higher Thursday afternoon on relief that Greece will not go ahead with a planned referendum on its bailout plan.
By the closing bell, the S&P/TSX composite index had vaulted 226.59 points, or 1.9%, to 12,468.35. This, after Greek Prime Minister George Papandreou made the announcement and added he has invited opposition conservatives to join talks on a major European debt deal.
The Canadian dollar strengthened 0.62 cents to 99.22 cents U.S., taking cheer from the same tidings.
A surprise rate cut by the European Central Bank also improved sentiment. The ECB pleasantly surprised markets by cutting its key interest rate by 0.25 of a point to 1.25%
The TSX energy sector gained ground, also boosted by strong earnings.
Canada’s biggest oil and gas company, Suncor Energy rose $1.41 to $33.20. The company reported earning $1.28 billion or 82 cents a share for the quarter as record oilsands production and improved refining performance helped offset lower overall output. Suncor’s earnings came in a penny higher than estimates.
Canadian Natural Resources Ltd. recorded adjusted net earnings of $719 million in the third quarter, or 65 cents per share, beating estimates by 12 cents a share, and up from $573 million a year ago. Its shares rose $3.25, or nearly 10%, to $38.23.
Shares in Encana Corp. rose after the natural gas giant announced it will sell its North Texas natural gas properties for about $975 million U.S. Its shares ticked 63 cents higher to $21.68.
The base metals sector was up as copper edged up one cent to $3.59 U.S. a pound. First Quantum Minerals improved by $1.85 to $22.35 and Ivanhoe Mines climbed 56 cents to $21.83.
The gold sector ran up as Barrick Gold Corp. climbed $1.32 to $52.50 and Goldcorp Inc. was ahead 90 cents to $52.25.
The financial sector was ahead amid losses from two big insurers.
Sun Life Financial shares lost $1.15 to $22.85 after it booked a quarterly loss of $621 million or $1.07 a share, its first quarterly loss in two years, mostly as a result of U.S. operations which took a more than half-billion-dollar hit due to stock market chaos. Analysts, on average, had expected a narrower loss of $1 per share.
The insurer had already warned of the loss last month, citing "substantial declines" in equity markets, lower interest rates and the impact of an annual refinement of the company’s methods and assumptions.
However, shares in Manulife Financial Corp. ran up 56 cents to $13.11 as the company posted a loss of $1.28 billion for its third quarter. Stripping out the effect of equity markets roiled by financial instability in Europe and other global factors as well as the impact of ultra-low interest rates, the company said it would have registered a loss of $388 million, compared with a loss of $2.99 billion in the third quarter of 2010. Its shares added four cents to $12.59.
Canadian investors had plenty of other earnings news to digest.
Telecom company BCE Inc. reported that its net income rose 41.4% to $642 million in the third quarter. On an adjusted basis earnings rose 14.8% to 93 cents per share, beating average analyst expectations of 74 cents, according to a poll by Thomson Reuters. Revenues increased 8.7% to $4.91 billion and its shares slipped 17 cents to $39.49.
Shares in auto parts giant Magna International Inc. fell 76 cents to $35.23 after it reported lower profits with quarterly net income coming in at $102 million, down from net income of $266 million a year ago.
Magna posted sales of $7 billion during the quarter, an increase of 21% from the year before.
ON BAYSTREET
The TSX Venture Exchange moved up 20.40 points to 1,642.44, while the Nasdaq Canada index regained 7.01 points to 427.58
Of the 14 Toronto subgroups, all but one were positive on the day. Health-care stocks shot 5% higher, energy stocks improved 3.5%, while metals and mining issues were 3.4% better.
The lone laggard was in the telecoms sector, off 0.7%.
ON WALLSTREET
In New York, investors stayed positive in afternoon trading on Thursday, focusing on the European Central Bank's surprise rate cut while keeping a wary eye on Greece.
The Dow Jones Industrials rocketed higher by 208.43 points, or 1.8%, to end the session at 12,044.50
The S&P 500 progressed 23.25 points to 1,261.15, while the Nasdaq Composite Index prospered 57.99 points to 2,697.97.
Stocks rallied from the open following the rate cut, the ECB's first in two years.
Political wrangling in Greece didn't deter investors. It remains unclear whether or not Greece will put its bailout to a public vote.
The ECB's rate cut gave investors some hope that incoming ECB President Mario Draghi might be more willing to intervene to buy bonds or take other steps to help the market. Still, Draghi steered clear of comment on that issue during his first press conference Thursday morning.
Draghi managed to also briefly frazzle the market when he said that Europe appeared poised to head into a mild recession. Stocks, however, quickly shrugged off the comments.
In late afternoon the leader of the main Greek opposition party called for Prime Minister George Papandreou to step down and for snap elections to be held within six weeks.The move by Antonis Samaras undermines the idea of consensus on the austerity measures attached to a European bailout package.
Worries about Greece were tempered somewhat earlier in the day after Greek Prime Minister George Papandreou backed off plans to hold a referendum on the nation's bailout, following an emergency cabinet meeting.
Papandreou said the referendum would not be necessary if the opposition supported austerity measures.
Meanwhile, shares of investment banking firm Jefferies were temporarily halted after the stock dropped roughly 20% on fears about the company's European sovereign debt exposure.
Investors have been closely watching Jefferies for any signs of trouble since the Chapter 11 filing of MF Global. Jefferies stock retraced some of its losses after the firm outlined its net exposure to the debt of Portugal, Ireland, Italy, Greece and Spain.
Investors fled many retail stocks after many October same-store sales reports came in lower than expected. Abercrombie's stock dropped roughly 21%.
Shares of Qualcomm climbed after the chipmaker issued a better-than-expected sales forecast for fiscal 2012, citing growing demand for smartphones.
Alpha Natural Resource's stock rose after the coal producer topped earnings and sales estimates, and boosted its coal shipment guidance for the year.
Shares of Estee Lauder also edged up on a positive earnings report.
DirecTV shares rose after the satellite TV provider drew in a record number of subscribers during the quarter, driving sales up 14% to surpass estimates.
Shares of Limited Brands slipped after the retailer's October same-store sales rose at a slower pace than analysts were expecting.
Groupon is slated to price its IPO late Thursday and begin trading on Friday morning, according to several news reports. It will trade on Nasdaq under the ticker symbol GRPN.
On the economic front, the U.S. Labor Department said weekly jobless claims eased by 9,000 to 397,000 last week, which was slightly below expectations.
Productivity of U.S. workers rose 3.1% during the third quarter, after falling 0.7% the prior quarter. Labour costs fell by 2.4%. Both readings were better than expected.
The government's monthly report on factory orders beat expectations. Analysts surveyed by Briefing.com expected factory orders to have dropped 0.2% in September, but instead they rose 0.3%.
The price on the benchmark 10-year U.S. Treasury retreated, raising the yield to 2.07% from 2.01% late Wednesday. Treasury prices and yields move in opposite directions.
Oil for October delivery acquired $1.55 to $94.06 U.S. a barrel
Gold futures for December delivery rose $30.40 to $1,760.20 U.S. an ounce.
