TSX gains again

Feb. 2, 2010 (Baystreet.ca) --

The Toronto stock market was higher for a second session on Tuesday amid further signs of an improving American economy. The S&P/TSX Composite Index continued its climb through the closing bell, gaining 90.79 points to 11,408.34 There was further good economic news Tuesday after the number of Americans preparing to buy a home rose slightly in December, a sign that home sales could be stabilizing heading into the spring home-buying season. The news was reassuring to investors who watched the TSX lose 5.5% during January on worries about the strength of an economic recovery. The Canadian dollar moved up against its American counterpart as Federal Finance Minister Jim Flaherty says there is no need for Ottawa to provide more stimulus spending for the economy beyond the end of the current program, which expires in 2011. Flaherty also said he will unveil his plans for eliminating the deficit, which is expected to hit a record $56 billion in the current fiscal year, in the upcoming March 4 budget. On the TSX, the base metals sector picked up ground as the March copper contract was ahead two cents at $3.10 U.S. a pound. Teck Resources gained 99 cents to $37.69 and HudBay Minerals was up nine cents to $12.69. The industrials sector ran up as Bombardier Inc. gained 31 cents to $5.48. The financial sector was ahead with Royal Bank ahead $1.02 to $53.84 and Scotiabank gained 62 cents to $45.81. The tech sector was also stronger, with Emergis Inc. up 23 cents to $3.03 while Research In Motion Ltd. was ahead $1.44 to $69.50. The energy sector was ahead as the March crude contract on the New York Mercantile Exchange climbed. The group was weighed down by Suncor Energy Inc., which reported fourth-quarter 2009 net earnings of $457 million, or 29 cents per share. The results missed analyst estimates of 42 cents a share, but reversed a net loss of $215 million a year earlier. Suncor shares fell $1.99 to $32.85. Bullion prices also made headway, as Kinross Gold Corp. improved 22 cents to $18.31. The telecom sector was the only negative component with Rogers Communications down 14 cents to $33.42 after Goldman Sachs Group Inc. added the company to its "conviction sell" list on expectation the company's growth will slow "for the foreseeable future." Shares in Saputo Inc. were ahead 82 cents to $29.82 after Canada's largest cheese maker had a $104.3-million profit in its latest quarter, an 80% increase over the year-earlier period. Elsewhere, First Uranium Corp. is slowing or suspending its various expansion plans in South Africa while it seeks alternative funding and negotiates with government officials. Its shares fell 42 cents or 22.34% to $1.46. Clearwater Seafoods Income Fund units were up seven cents to 95 cents after it said it's asking for a three-year extension on redeeming debt that's currently due to mature at the end of 2010. The Halifax-based seafood producer is proposing a number of amendments to compensate the debtholders for the delay, including a higher interest rate. The Canadian dollar gained another 0.32 cents to 94.48 cents U.S. ON BAYSTREET All but one of the 14 TSX subgroups were higher on the day. Information technology processed the best results, up 2.2%, followed by industrials, ahead 2.1% and real-estate, gaining 1.8%. Only gold failed to shine its brightest, fading 0.1%. The TSX Venture Exchange was 7.13 points better at 1,517.07, while the Nasdaq Canada index was ahead 16.05 points to 716.13. ON WALLSTREET In New York, stocks rallied Tuesday, with the Dow Jones industrials posting their second straight double-digit gain, as investors welcomed better-than-expected corporate results, signs of stability in the housing sector and solid auto sales. The Dow Jones industrial average grew by 111.32 points, or 1.1%, to end up at 10,296.85. The S&P 500 index progressed 14.13 points to 1,103.32. The Nasdaq composite was ahead 18.86 points to 2,190.06. Treasury prices rose, lowering the corresponding yields, while a weaker dollar lifted commodity stocks. Stocks are rising this week as investors step back in after a two-week selloff that saw the S&P 500 lose almost 7%. Worries about President Obama's plan to limit trading at big banks, China's lending curbs and global debt worries all led to the selloff. While the concerns haven't disappeared, investors nonetheless used the selloff as an opportunity to dip back into stocks at a lower level. Gains were broad based Tuesday, with 28 of 30 Dow stocks rising, including Alcoa, which was upgraded by Citigroup. Major automakers, including Ford Motor, General Motors and Nissan all reported improved January sales. However, Toyota, which earlier this month recalled millions of cars due to a faulty gas pedal, saw a bigger-than-expected decline in January sales. UPS reported lower quarterly revenue and earnings versus a year earlier, but the results topped analysts' expectations. The company also issued a 2010 earnings forecast of $2.70 to $3.05 U.S. per share, up from 2009. Analysts are expecting $2.81 U.S. per share. Homebuilder D.R. Horton reported quarterly earnings of 56 cents U.S. per share in its fiscal first quarter, surprising analysts who thought it would report a loss. The company benefited from a big tax gain. The company also said new orders and completed sales rose significantly in the quarter. Shares gained 10% in active New York Stock Exchange trading. Emerson Electric, a maker of automation systems for a broad range of companies, reported weaker quarterly sales and earnings that surged past forecasts. Shares gained 8%. With around 48% of the S&P 500 having reported results, earnings are currently on track to have risen 204% from the prior year, according to the latest estimates from Thomson Reuters. But the improvement is mostly because of cost-cutting and easy comparisons to a wretched fourth quarter of 2008. Economically speaking, the National Association of Realtors' pending home sales index rose 1%, in line with expectations. The index fell 16.4% in the previous month. Auto sales are due throughout the day. The Senate Budget Committee was holding a hearing on the 2011 budget. In prepared testimony, Treasury Secretary Timothy Geithner said a bipartisan effort is needed to trim a deficit the Obama White House mostly inherited from the Bush administration. He said the economy has recovered, but it will take time for the private sector to create new jobs. Former Federal Reserve Chairman and current economic adviser Paul Volcker testifies on financial reform before the Senate Banking Committee later in the day. UPS reported lower quarterly revenue and earnings versus a year earlier, but the results that topped analysts' expectations. The company also issued a 2010 earnings forecast of $2.70 to $3.05 U.S. per share, up from 2009. Analysts are expecting $2.81 U.S. per share. With around 48% of the S&P 500 having reported results, earnings are currently on track to have risen 204% from the prior year, according to the latest estimates from Thomson Reuters. But the improvement is mostly because of cost-cutting and easy comparisons to a wretched fourth quarter of 2008. The financial sector is expected to lead the advance, rising 73% versus a year earlier. Strip out financial sector results and earnings are only expected to rise 15%. Revenue is set to rise about 8% year over year. Without financials, revenue is expected to rise about 3%. Treasury prices moved up, lowering the yield on the 10-year note to 3.63% from Monday's 3.65%. Treasury prices and yields move in opposite directions. The price of a barrel of oil went up $2.88 to $77.31 U.S. Gold prices added $13 to $1,118 U.S.