TSX sneaks into green

Gold, materials at helm

Apr. 30, 2010 (Baystreet.ca) --

Gold and energy stocks led Toronto's main index higher Friday afternoon, amid rising commodity prices and data affirming continued economic expansion in both sides of the border.

The S&P/TSX composite index fell off its highs of the day to finish 10.38 points to the good to wind up the day, week and month at 12,210.70.

The index lost 28.94 points on the week, or 0.2%, but prospered on the month, 172.97 points or 1.44%.

Hopes of a Greek bailout deal nearing underpinned the sentiment.

The Canadian economy grew for the sixth straight month in February, while the U.S. gross domestic product marked the third consecutive quarter of growth.

The Global Gold Index rose as Barrick Gold added 3.2% to $44.41 and Iamgold advanced 4.2% to $18.19.

Among energy stocks, Suncor energy gained 2.1% to $34.82 and Encana gathered 2.2% to $33.66.

However, the gains were not broad-based. Technology was deep in the red, while financials, base metals, industrials and consumer staples declined moderately.

The IT Index fell, with Open Text plummeting 9.5% to $42.79. The content management software provider reported a decline in third-quarter profit to $13.1 million U.S. from last year's $22 million U.S., with adjusted net income of $0.70 U.S. per share falling short of consensus estimate of $0.74 U.S. per share.

In the financial sector, BMO eased 0.9% to $63.07 and RBC lost 1% to $61.75

CIBC gave in 1% to $74.64. The bank revealed acquiring full ownership of asset-based lending firm CIT Business Credit Canada Inc., which it jointly owned with a subsidiary of US commercial lender CIT Group Inc.

Base metals producer Lundin Mining shed 3% to $4.79, construction and engineering firm SNC-Lavalin trimmed 2.4% to $50.55 and food processing company Maple Leaf Foods lost 3.3% to $9.60.

Utility company Fortis, which reported a first-quarter profit that rose to $100 million from $92 million for the year-ago quarter, gained 2.1% to $28.05.

In economic news, Statistics Canada said the country's real gross domestic product increased 0.3% in February, largely helped by growth in manufacturing and mining. The manufacturing sector grew 1.2% and the mining sector increased 0.4% in February.

In another report, the agency said the Industrial Product Price Index (IPPI) declined 0.4% and the Raw Materials Price Index rose 0.8% in March The IPPI declined in March after advancing in the past four months. The agency noted that the 3.3% gain in the value of the Canadian dollar versus the U.S. dollar had impacted the IPPI.

The Canadian dollar fell back 1.04 cents Friday to 98.41 cents U.S.

ON BAYSTREET

Of the 14 TSX subgroups, eight had lost their luster by the closing bell. IT stocks suffered the most at 2.3%, while global base metals descended 1.9% and industrials skidded 1.5%.

The half-dozen gainers were led by gold, up 2.3%, materials, up 1.4% and health-care, 1% stronger.

The TSX Venture Exchange added 13.83 points to 1673.80 – a gain on the week of 2.88 points or 0.2% -- while the Nasdaq Canada index backtracked 12.53 points Friday to 785.09.

The Venture Exchange added 97.32 points or 6.2% over April.

ON WALLSTREET

In New York, stocks tumbled Friday after reports that Goldman Sachs is facing a criminal probe sparked analyst downgrades and a selloff in the financial sector. Worries about Greece's lingering debt problems also weighed.

The Dow Jones industrial average lurched lower on the day by 158.71 points, or 1.4%, to 11,008.61. The big board broke its eight-week winning streak -- its longest up stretch in six years -- by giving back 195.67 points or 1.8%

The S&P 500 index slipped 20.09 points to 1,186.69 (a loss on the week of -30.59 points or 2.5%, for only its second weekly loss in the last nine. On the month, the 500 was up 17.26 points or 1.5%). The Nasdaq composite index tumbled 50.73 points to 2,461.19 (a weekly loss of 68.96 points or 2.7%, shattering its eight-week winning streak. On a monthly basis, though, the tech-heavy Nasdaq surged 63.23 points or 2.6%).

Stocks had seesawed in the early going but soon turned lower after ratings agency Standard & Poor's downgraded Goldman Sachs following reports it is the target of a criminal investigation by federal prosecutors.

S&P downgraded the stock to "sell." Bank of America/Merrill Lynch also downgraded it to "neutral" from "buy" before the start of trading. Goldman shares fell 10%.

A number of financial shares slipped, including JPMorgan Chase, Bank of America and Morgan Stanley. The KBW Bank sector index lost 1.4%.

But the declines were broad based, with 28 of 30 Dow shares retreating. In addition to the financial components, other big losers included Boeing, Caterpillar, Hewlett-Packard, IBM, McDonald's and Microsoft.

The stock selling propelled the CBOE Volatility index by 20%. Seen as the investor fear gauge, the VIX spiked to just short of the two-month highs it touched earlier in the week.

Strong quarterly profit reports propelled markets Thursday, with the Dow, S&P 500 and Nasdaq gaining over 1% each. But investors were cautious Friday at the end of a choppy week in which worries that Greece might default on its debt sent the major indexes tumbling by more than 2% on Tuesday.

Continental and UAL Corp.'s United Airlines are in late-stage negotiations to merge, according to reports, with a deal expected as soon as this weekend. Continental shares rose 0.7% and UAL shares rose 1% in morning trading.

Chevron was little changed after reporting quarterly sales and earnings that rose from a year earlier and topped forecasts.

With 67% of the S&P 500 having reported results, earnings are on track to have grown 53% from a year earlier and revenues 11%, according to the latest info from tracker Thomson Reuters.

The U.S. economy grew at a 3.2% annual rate in the first quarter, the Commerce Department reported Friday. It was short of the 3.3% economists were predicting, according to a Briefing.com survey, but was still the third quarter in a row that U.S. gross domestic product grew.

GDP rose at a 5.6% annualized rate in the fourth quarter of 2009.

Elsewhere on the economic front, the University of Michigan's final reading on April consumer sentiment was revised up to 72.2 from 69.5, beating forecasts for a revision to 71.

The Chicago PMI, a regional reading on manufacturing, rose to 63.8 in April from 58.8 in March, versus forecasts for a rise to 59.9.

Concerning deals, Continental and UAL Corp.'s United Airlines are in focus after the Wall Street Journal reported that the two are close to a merger deal. Continental shares rose 3% and UAL shares rose 5% in morning trading.

Treasury prices gained on the day, lowering the yield on the 10-year note to 3.66% from Thursday's 3.73%. Treasury prices and yields move in opposite directions.

The price of a barrel of oil gained 79 cents to $85.96 U.S.

Gold prices tacked on $11 to $1,179 U.S. an ounce.