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Feb. 18, 2010 (Baystreet.ca) --
The Toronto stock market was modestly higher Thursday afternoon as rising metal prices boosted the mining sector while the gold component was positive amid well-received earnings reports from three big gold producers.
The S&P/TSX composite index closed the day up 59.35 points, to 11,694.84.
The gain followed a solid six-day winning run that boosted the TSX index by 4.7% as commodity prices gained ground while fears of a debt default by Greece seemed to ease somewhat.
But analysts say the issue continues to weigh on investor sentiment.
Investors also took in major dealmaking in the financial sector. Fairfax Financial Holdings Ltd. announced it will buy the rest of Zenith National Insurance Corp. in a transaction that values the California-based workers' compensation insurance specialist at about $1.4 billion U.S.
Toronto-based Fairfax will pay $38 U.S. per share for the stock in Zenith it doesn't already own. Fairfax shares were up $7.29 to $374.99 while Zenith shares surged $8.84 to $37.75 U.S. in New York.
The energy sector climbed, as EnCana Corp. was up 40 cents to $34.95.
Nexen Inc. reported a $259-million net profit in the fourth quarter, a turnaround from the $181-million loss that the oil and gas producer experienced a year earlier. Nexen shares gained 43 cents to $23.54.
The base metals sector was up, with the March copper contract in New York ahead five cents to $3.28 U.S. a pound. Equinox Minerals fell eight cents to $3.33 while First Quantum Minerals gained $3.85 to $79.57.
Among gold issues, Barrick Gold said Thursday that fourth-quarter operating profit came in at $215 million U.S., reversing a year ago loss of $468 million U.S. amid stronger gold prices.
It also reported that it was spinning off its African assets into a new publicly traded company to be called African Barrick Gold. Revenue jumped 13% to $2.36 billion U.S. Its shares were up $1.29 on the TSX to $40.94.
Agnico-Eagle Mines Ltd. shares gained 98 cents to $62.87 after it said its fourth-quarter earnings more than doubled to $47.9 million U.S. It also said Wednesday that revenue soared to $232 million U.S. compared with $36.4 million U.S. in 2008 when the company suffered a writedown on the sale of available securities of $39.2 million U.S.
Shares in Kinross Gold Corp. advanced 33 cents to $19.68 as the miner said it earned $235.6 million U.S. in its latest quarter compared with a loss of $968.8 million a year ago while its revenue grew by more than 40%.
In economic news, Statistics Canada said consumer prices rose 1.9% in the 12 months to January, following a 1.3% increase in December. On a monthly basis, prices rose 0.4% from December. The inflation rate is just below the central bank's 2% target and is unlikely to trigger interest rate hikes before the second half of 2010.
In another report, the agency said non-residents acquired $11.2 billion of Canadian securities in December and Canadian investment in foreign securities, which was up in November after four months of divestments, slowed to $663 million in December.
The Canadian dollar surged 0.42 cents to 96.02 cents U.S.
ON BAYSTREET
All but two of the 14 TSX subgroups were positive. Information technology gained the most, up 1.9%, while metals and mining stocks surged 1.5% and materials hurtled up 1.2%.
The two laggards were utilities, down 0.3% and consumer discretionaries, tailing off 0.2%.
The TSX Venture Exchange regained 4.96 points to 1,523.68, while the Nasdaq Canada index gained 8.34 points to 758.86.
ON WALLSTREET
In New York, stocks rallied Thursday afternoon, finding momentum after a choppy morning, as the dollar turned mixed and investors began to focus on the day's stronger earnings and economic reports.
The Dow Jones industrial average tacked 83.66 points, to end the session at 10,392.90. The S&P 500 index gained 7.24 points to 1,106.75, and the Nasdaq composite added 15.42 points to 2,241.71.
Stocks had been volatile through the early afternoon as investors eyed Wal-Mart's cautious outlook, a jump in weekly jobless claims and a rise in a key inflation indicator.
The firmer dollar was also in play, pressuring dollar-traded commodity prices and the stocks of companies that do a lot of business overseas and are hurt by a stronger greenback.
But the dollar turned mixed in the afternoon and a number of energy stocks rallied. Other gainers on the day were concentrated in the bank and tech sector.
Twenty-five of 30 Dow stocks rose, led by Boeing, Chevron, IBM, Travelers Companies and Hewlett-Packard. HP's better-than-expected quarterly results fueled its stock gains.
Stocks gained Wednesday thanks to a better-than-expected housing report, a mixed forecast from the Federal Reserve and some upbeat company news. The gains followed a big rally Tuesday.
Hewlett-Packard reported higher quarterly earnings and revenue that topped expectations, after the close Wednesday. The company also boosted its outlook for the full year. HP shares rose 1%.
Wal-Mart Stores reported higher quarterly earnings that topped estimates on higher quarterly revenue that missed estimates.
The company also said that sales at stores open a year or more, a retail metric known as same-store sales, fell 1.6% for the quarter, the first quarterly decline. Same-store sales were flat for the year.
Looking out, the company said its U.S. business was likely to continue to struggle in the tough economy. Wal-Mart forecast first-quarter earnings of between 81 cents and 85 cents U.S. per share versus forecasts for 85 cents U.S. Wal-Mart shares fell 1.5%.
AIG said it will keep up to 25% of the controversial assets that nearly caused its demise, after previously planning to sell off its entire derivatives portfolio. The company now says it will hold onto up to $500 billion in assets so as to take advantage of the recent recovery in credit markets.
AIG shares were barely changed.
President Obama issued an executive order for the formation of a bipartisan debt panel, after the Senate voted last month to kill plans to create a similar commission.
Elsewhere on the economic front, the Labor Department reported that initial jobless claims surged to 473,000 in the week ended Feb. 13, an increase from the prior week's upwardly revised figure of 442,000.
That was much worse than expected. Initial jobless claims were forecast to have totaled 430,000, according to a consensus of economist opinion from Briefing.com.
The producer price index rose a seasonally adjusted 1.4% in January, which was much higher than expected. The PPI was forecast to increase 0.8%, according to Briefing.com consensus, compared to a gain of 0.4% in December.
Other economic reports released Thursday included the Philadelphia Fed index, a regional reading on manufacturing and the index of leading economic indicators (LEI).
LEI rose 0.3% in January after rising 1.2% in December. Economists thought it would rise to 0.5%.
The Philadelphia Fed index rose to 17.6 in February from 15.2 in January. Economists thought it would rise to 17.
Treasury prices dipped, raising the yield on the 10-year note to 3.80%, from 3.74% Wednesday. Treasury prices and yields move in opposite directions.
The price of a barrel of oil increased $1.76 to $79.09 U.S.
Gold prices gave back a dollar to $1,119 U.S.