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Mar. 1, 2010 (Baystreet.ca) --
The Toronto stock market was higher mid-afternoon on Monday amid signs that Canada's economy was surprisingly strong at the end of 2009 and a well-received report on the U.S. manufacturing sector.
The S&P/TSX composite index began March with a bang, climbing 98.43 points to 11,728.06.
The telecom sector advanced, with BCE Inc. ahead 80 cents to $30 while Telus Corp. gained 58 cents to $35.11.
The industrials sector was up with Canadian National Railways ahead 87 cents to $56.17 and Bombardier Inc. up 17 cents to $5.86.
The gold sector was up, as Barrick Gold Corp. rose 40 cents to $40.05.
The base metals sector was ahead, as commodity stocks turned higher with copper hitting its highest level in 11 months.
The May copper contract on the New York Mercantile Exchange gained eight cents to $3.35 U.S. a pound, after earlier shooting as high as $3.47 U.S.
Many mines in Chile have been affected by a massive quake that registered 8.8 on the Richter scale. Analysts say mines have been particularly affected by damage to infrastructure, especially electricity.
Teck Resources said "its Chilean operations were not damaged, have been minimally affected and are operating normally." Teck shares rose $1.24 to $39.94 on the TSX.
Shares in Breakwater Resources which operates mines in Chile, Honduras and Canada, were up half a cent to 43.5 cents. Its preliminary assessment was “no damage to infrastructure” at its Toqui mine site.
Elsewhere in the mining sector, Anglo-Australian miner Rio Tinto said Monday it has acquired 15 million additional shares in Ivanhoe Mines Ltd., increasing its ownership in the Canadian company to 22.4 per cent. Rio Tinto bought each share at $15.50, for a total investment of $244 million. Ivanhoe shares gained 16 cents to $16.97.
Rio Tinto and Ivanhoe Mines are development partners for the Oyu Tolgoi copper project in Mongolia.
The energy sector gained ground as oil prices fell. Canadian Natural Resources gained $1.06 to $71.94.
South Korea's Korea Gas Corp. is investing $565 million in two Canadian natural gas plays. It has signed a three-year farm-in deal with EnCana Corp. for 50% interests in properties within the Montney and Horn River Basin shale formations in northeastern B.C. EnCana shares rose 82 cents to $35.31.
In economic news, Statistics Canada reported that the country's Gross Domestic Product expanded at a 5% annualized rate in the fourth quarter 2009. This could put pressure on the policy maker to hike interest rates. Notably, Bank of Canada is scheduled to decide on interest rates tomorrow.
In a separate release, the agency said the Industrial Product Price Index rose 0.3% and the Raw Material Price Index was up 3.3%.
Meanwhile, according to a survey by the Royal Bank of Canada released earlier today Canadian Consumer Outlook Index rose to 109 in February from 106 in January. The index, bench marked as of November 2009, has hit its highest level this month.
The Canadian dollar gained 0.95 cents to 95.96 cents U.S.
ON BAYSTREET
All but one of the 14 TSX subgroups gained ground Monday. Utilities picked up 1.6%, followed by telecoms, gaining 1.5%, while industrials were up 1.3%.
Only a 0.3% slide by health-care stocks kept things from being unanimous.
The TSX Venture Exchange recovered 6.42 points to 1,537.61, while the Nasdaq Canada index gained 1.06 points to 754.92.
ON WALLSTREET
In New York, stocks rose Monday as investors welcomed AIG's $35-billion U.S. asset sale, talk of mergers in the pharmaceutical sector and a better-than-expected report on consumer spending.
The Dow Jones industrial average moved higher 78.53 points to 10,403.79. The S&P 500 index picked up 11.22 points to 1,115.71, and the Nasdaq composite added 35.31 points to 2,273.57.
Stocks rallied Monday, the first day of March, as investors dug back in after last week's retreat. Stocks have been choppy and volatile this year in the aftermath of 2009's big rally.
Stocks jumped last year after trillions of dollars in fiscal and monetary stimulus were injected into the financial system. But optimism about a 2010 economic recovery also fueled the advance.
However, mixed signals about the economy this year have given investors pause as they look for clearer indications that a recovery is not only in place, but can take on a life of its own once the government stimulus fades out.
Concerns that Greece's debt crisis could spread to the rest of Europe and that China is seeking to pull back its expansion all dragged on stocks earlier in the year. But stocks have risen in two of the last three weeks.
As of Monday afternoon, the Dow and S&P 500 were both just short of turning positive for the year. The Nasdaq was just barely positive.
AIG said Monday that it was selling its Asian life insurance business to Britain's Prudential PLC in a deal worth $35.5 billion. The deal includes $25 billion U.S. in cash, $16 billion U.S. of which the company has earmarked to pay back the government and taxpayers.
Troubled AIG has avoided collapse by borrowing about $132 billion U.S. from the government since 2008.
On Friday, the company reported a fourth-quarter loss of $8.9 billion U.S., due mostly to costs connected to selling off large stakes in its insurance businesses.
Shares gained 6.6% Monday.
In deal news, Japanese drugmaker Astellas Pharma made an unsolicited $3.5-billion bid for OSI Pharmaceuticals maker of the blockbuster Tarceva cancer drug. The deal represents a 40% premium over OSI's Friday closing price.
OSI said it would review the offer and that shareholders should make no move as of yet. OSI shares rallied 51% Monday.
Over the weekend, German pharmaceutical company Merck KGaA said it would buy U.S.-based Millipore for $7.2 billion U.S. Millipore is a life sciences tools maker. Millipore shares gained 11% Monday.
MSCI said it would buy risk advisory firm RiskMetrics Group in a $1.55-billion U.S. cash-and-stock deal.
SanDisk boosted the Nasdaq, jumping 11% to $32.42 U.S., after the flash memory card maker raised its first-quarter sales outlook to between $925 million and $1 billion U.S.
Amid ongoing worries about Greece's ballooning deficit, Olli Rehn, the European Union's financial affairs commissioner, urged the nation to make more budget cuts. Greece has already announced plans to raise the retirement age and freeze wages, but Rehn said such moves are not enough.
Greece's finance minister, Giorgos Papaconstantinou, said the government would do "whatever it takes" to cut the deficit.
Investors had plenty of economic data to mull over on Monday.
The Institute for Supply Management's manufacturing index fell to 56.5 in February from 58.4 in January, surprising economists who thought it would only fall to 58. Any reading over 50 signifies expansion in the sector.
Construction spending declined 0.6% in January after falling 1.2% in the previous month, the government reported. The drop was in line with estimates.
Personal income rose 0.1% in January after gaining 0.3% in December. Economists expected income to rise 0.4%. Personal spending jumped 0.5% after rising 0.3% in the previous month. Economists thought spending would rise 0.4%.
Treasury prices were mixed, and the 10-year note yielded 3.62%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil gave back 91 cents to $78.75 U.S.
Gold prices slipped a dollar to $1,118 U.S.