TSX gains ground

Metals, gold lead way

Apr. 22, 2010 (Baystreet.ca) --

The main Toronto stock index erased its earlier losses in afternoon trading Thursday -- and actually went into the green -- as buyers took advantage of low prices to move back into the market. The S&P/TSX Composite Index ended the day ahead 26.31 points, to 12,160.87 On the TSX, shares in Suncor Energy Inc. lost 21 cents to $33.86. The base metals sector added strength as the May copper contract on the Nymex slipped 4.85 cents to $3.49 U.S. per pound. Shares in Teck Resources Ltd. shares jumped $2.28 or 5.5% to $43.99 after the company said it would reinstate its dividend at an annual rate of 40 cents per share. Among gold issues, Goldcorp Inc. gained 34 cents to $39.87. Among financial issues, Royal Bank of Canada stock gained 22 cents to $61.78. In corporate news, Precision Drilling Trust said its first-quarter profit improved a smaller-than-expected 8% from a year ago to $62 million as oil well activity exceeded expectations. Shares in Precision gained eight cents to $7.73. Celestica Inc.'s first-quarter profit was up nearly 35% from a year ago, although its adjusted earnings improved less than analysts expected. Shares in the Toronto-based contract manufacturer, which makes products in factories around the world for brand-name companies, added 13 cents to $10.55. Cenovus Energy Inc. said an independent analysis confirmed that the oilsands company has between 3.9 billion and 7.3 billion barrels of bitumen reserves, before royalties. Shares in Cenovus lost 56 cents or 1.9% to $28.54. And shares in Enerchem International Inc. jumped 83 cents or more than 44% to $2.70 after it announced it had received a takeover offer from an unnamed private Canadian company in a $41.4-million all cash deal. In economic news, Bank of Canada governor Mark Carney said Thursday the pace of economic growth in Canada has already begun to slow. He said the housing sector will become a negative influence on growth by next year, and the withdrawal of government stimulus, the high Canadian dollar and continued low demand in the United States will be a further drag on the economy. Statistics Canada reported that the number of people who received regular Employment Insurance benefits in February was virtually unchanged from the previous month. The number of people receiving regular EI benefits has declined by 130,500 since the peak of 829,300 last June. And the Canadian composite leading index -- a measure of economic strength that tends to precede actual changes in the economy -- rose 1% in March, matching its average monthly increase since July 2009. Statistics Canada said the sources of growth continued to shift from housing to other sectors of consumer demand and manufacturing. The Canadian dollar remained near parity with the American dollar, though skidding 0.11 cents to 99.95 U.S. ON BAYSTREET All but four of the 14 TSX subgroups were higher by midday. Global base metals led the parade, up 1%, metals and mining and gold were ahead 0.9% each. Real-estate was the worst off of the four losing groups, sliding 0.7%, while industrials were down 0.6% and health-care stocks fell 0.2%. The TSX Venture Exchange moved ahead 4.55 points to 1,652.05, while the Nasdaq Canada index crept up 0.23 points to 792.56. ON WALLSTREET In New York, stocks ended higher Thursday, erasing a steep morning selloff sparked by Greek debt default worries, a spike in the dollar versus the euro and a plunge in commodity prices. The Dow Jones industrial average erased earlier losses to gain 9.37 points to end the day at 11,134.29. The S&P 500 index tacked on 2.73 points to 1,208.67. The Nasdaq composite index regained 14.46 points to 2,519.07. Also in focus: President Obama's speech on financial reform, a better-than-expected housing market report, a mixed reading on weekly jobless claims, a rise in wholesale inflation and the latest round of corporate profit results. Fears that Greece's fiscal problems are even worse than expected sent global markets lower Thursday, lifting the dollar versus the euro and pummeling the commodity sector. But U.S. stocks managed to fight off the selling pressure as the session wore on, with commodity and financial shares cutting their losses. Rather than driven by a specific event, the recovery attempt in the afternoon was a function of all the cross currents in the market, said one expert Stocks ended mixed Wednesday as the impact of strong earnings was tempered by concerns about the strength of the economic recovery and some investor exhaustion after the recent rally. Stocks have risen over the last few months, with the Dow and Nasdaq rising in eight of the last nine weeks and the S&P 500 climbing in seven of the last nine weeks. Worries that the nation might default on its debt have dragged on stocks for the last few months, countering improved earnings and signs of stability in the global economy. Investors fear that a Greek default could trigger a bigger debt crisis in other strapped euro-zone nations, destabilizing the euro and threatening the strength of the global economic recovery. Fears were tempered last week when the European Union (EU) and the International Monetary Fund agreed to make billions in loans available to Greece at below market rates. However, concerns were reignited Thursday after an EU report suggested that Greece's 2009 deficit was bigger than the government reported. The credit rating agency Moody's downgraded Greece's debt to a lower investment grade, and initiated a further review. CenturyTel said it would buy fellow local phone company Qwest Communications in a stock swap worth $10.6 billion U.S. US Airways said it has ended merger talks with United Airlines, owned by UAL Corp., amid talk that United was considering pursuing a merger with Continental. Starbucks reported higher quarterly profit that beat estimates and boosted its 2010 outlook late Wednesday. Shares rallied 7.5% Thursday. Earnings were due from American Express Microsoft and Amazon.com after the bell. Oil services firms Chevron and Exxon Mobil dragged on the Dow, along with Hewlett-Packard, Johnson & Johnson, JPMorgan Chase and Merck. But gains in Boeing, McDonalds and Travelers helped offset those losses. President Obama made a push for financial reform Thursday, urging industry leaders to "join us, instead of fighting us in this effort." Speaking at Cooper Union in New York, near Wall Street, Obama addressed an audience of students, union leaders and some of the financial industry's most prominent executives, including Goldman Sachs CEO Lloyd Blankfein. Last week Goldman Sachs was accused by the Securities and Exchange Commission of defrauding investors in a subprime mortgage deal during the crisis. Obama's speech occurred as Congress is debating a financial reform package that Democrats say would enable the U.S. to avoid another financial crisis. However, debate has been contentious amid differences of opinion over how to avoid further taxpayer-funded bailouts and ultimately prevent another crisis. Economically speaking, the National Association of Realtors said existing home sales rose to a 5.35-million-unit annual rate in March from a 5.01-million-unit rate in February. Economists surveyed by Briefing.com thought sales would rise to 5.29 million units. The government also released reports on first-time claims for unemployment benefits, and inflation at the wholesale level before the market opened. There were a total of 456,000 initial jobless claims filed in the week ended April 17, down from the previous week's revised figure of 480,000, according to the Labor Department's weekly report. The report was roughly in line with expectations and marked the first time in three weeks that claims declined. Economists surveyed by Briefing.com had anticipated 455,000 initial claims. Separately, government figures showed inflation at the wholesale level rose more than expected in March. The Producer Price Index increased 0.7% last month after falling 0.6% in February. Economists were expecting a 0.5% rise in March. Treasury prices lost ground, raising the yield on the 10-year note to 3.77%, from Wednesday's 3.74%. Treasury prices and yields move in opposite directions. The price of a barrel of oil was flat at $83.68 U.S. Gold prices lost seven dollars to $1,142 U.S. an ounce.