Toronto's main stock index leapt from the gates on Wednesday, extending gains from the previous session and getting to within spitting distance of the 12,000-point mark, after China unexpectedly cut its bank reserve requirement ratio by 50 basis points, other central banks eased liquidity problems, and investors digested benign Canadian growth data.
The S&P TSX Composite Index began Wednesday’s session ahead 252.34 points, or 2.2%, to 11,984.84
The Canadian dollar advanced 1.78 cents to 98.70 U.S. cents.
Among Canadian stocks to watch this morning, energy producer Nexen Inc. formed a joint venture with China's top offshore oil company CNOOC Ltd in the Gulf of Mexico, a day after the Canadian oil company sold a 40% stake in some of its gas assets in British Columbia.
The company that owns the Toronto Stock Exchange, TMX Group, said Canada's commissioner of competition expressed "serious concerns" about the likely competitive effects of Maple Group's proposed plan to buy the company.
Enbridge Inc. said its proposed $5.5-billion pipeline to British Columbia poses a raft of environmental risks, according to a new report that signals the project will become the next battleground over the future of Canada's oil sands.
Cameco Corp. said Finnish miner Talvivaara has secured approval from the European Union to sell uranium, it said on Wednesday, allowing it to press ahead with an off-take agreement with the company, signed earlier this year.
On the economic calendar, Statistics Canada told us that Real Gross Domestic Product (GDP) hiked 0.9% in the quarter ending in September, after falling 0.1% in the second quarter. The gain was due largely to a jump of 0.3% in consumer spending. On a monthly basis, real GDP by industry increased 0.2% in September.
Elsewhere, the Industrial Product Price Index skidded 0.1% in October, while the Raw Materials Price Index tumbled 1.2%, in both cases due to decreases in the price of metals.
ON BAYSTREET
The TSX Venture Exchange prospered 24.32 points to 1,529.33, while the Nasdaq Canada index added 12.56 points to 400.97
All 14 Toronto subgroups raced ahead in the early going. Metals and mining climbed 5.2%, global base metals took on 5% and materials gained 3.2%.
ON WALLSTREET
In New York, stocks surged Wednesday, after the U.S. Federal Reserve said that it will act with other central banks to boost liquidity and support the global economy. Global markets rallied on the news as well.
The Dow Jones Industrials skyrocketed 398.85 points, or 3.5%, in the first half-hour of trading to 11,954.50
The S&P 500 increased 40.10 points, to 1,235.29, while the Nasdaq Composite ballooned 77.22 points to 2,592.73
The central banks' coordinated moves also gave a big boost to bank stocks and helped investors ignore Tuesday evening's Standard & Poors' downgrade of big bank stocks. Shares of Goldman Sachs, Morgan Stanley, Citigroup, and JPMorgan Chase spiked more than 4%. Bank of America, which hit its 52-week low Tuesday, also moved up 4.5%.
The Fed, along with five other central banks including the European Central Bank and the Bank of Canada, announced a joint action to lower interest rates on dollar liquidity swaps -- to make it cheaper for banks around the world to trade in U.S. dollars.
Shares of American Eagle rose after it released quarterly results before the opening bell.
Meanwhile, shares of Jos. A. Bank fell after the retailer released its quarterly results Wednesday morning.
On Tuesday, American Airlines' parent company, AMR Corp., announced it had filed for Chapter 11 bankruptcy. The company's stock plunged more than 80% during trading Tuesday, but rose 59% in early trading Wednesday.
Economically speaking, a report from Automatic Data Processing showed that private sector employment grew by 206,000 jobs in November. Economists surveyed by Briefing.com expect private sector jobs to have increased by 125,000 for the month of November.
The government will also release revisions of its third-quarter figures for productivity and unit labour costs. In the afternoon, the Fed's Beige Book will summarize economic outlooks from the 12 district banks across the country.
The price on the benchmark 10-year U.S. Treasury plummeted, pushing the yield up to 2.08% from 2.00% late Tuesday. Treasury prices and yields move in opposite directions
Oil for January delivery added $1.24 to $101.03 U.S. a barrel.
Gold futures for December delivery moved up $3.02 to $1,743.60 U.S. an ounce.
