Markets pick up

Apr. 1, 2009 (Baystreet.ca) --

04:25 pm EST Stock markets racked up solid, triple-digit advances Wednesday thanks to readings on U.S. vehicle sales, manufacturing and construction, which helped balance other data suggesting bigger-than-expected American job losses last month.

The S&P/TSX Composite Index concluded a very successful start to the second quarter, advancing 203.43 points, or 2.3%, to 8,923.82

The performance extended a rally that started just over three weeks ago and has lifted the TSX about 16% after the main index had sold off to 2004 levels.

The Toronto market's energy sector was ahead even as U.S. crude inventories rose a more than expected 2.8 million barrels last week and gasoline stockpiles increased despite analysts' predictions for a steep drop

EnCana Corp. gained $1.73 to $53.33 and Suncor Inc. rose 46 cents to $28.60.

Perhaps investors took some cheer from statements published Wednesday by the head of the Royal Bank of Canada. CEO Gordon said the worst of the financial crisis may be over.

"The financial services crisis has stabilized," Nixon said in an interview yesterday in New York. "The worst is over."

Nixon also went on record as saying Canada's biggest banks probably won't need to tap a $218-billion debt backstop program set up by the federal government because their finances are sound.

The financial sector improved as TD Bank rose 88 cents to $44.34 and CIBC climbed $1.76 to $47.64. Shares in the Royal Bank of Canada jumped 69 cents to $37.47.

The base metals sector rose as Teck Cominco Ltd. gained 67 cents to $7.72 and Ivanhoe Mines Ltd. rose 89 cents to $8.67.

The gold sector moved up, as Barrick Gold Corp. gained $1.74 to $42.55.

AbitibiBowater Inc. said Wednesday it would pursue new restructuring options after an effort to refinance its U.S. subsidiary's $1.8-billion U.S. debt expired.

The Montreal-based newsprint producer said debt exchange offers meant to tackle Bowater's debt have been terminated, with all previously tendered notes being returned to their original holders and its shares fell 16 cents to 66 cents.

Shares in Research in Motion Ltd. were ahead $3.22 to $57.71 as the BlackBerry maker launched its one-stop shop for add-on applications. BlackBerry App World is available as a free download from RIM's website, with 1,000 applications. Users need an account with eBay Inc.'s PayPal payment service and a BlackBerry with a trackball or touch screen.

The Canadian dollar was flat at 79.28 cents U.S.

ON BAYSTREET

Of the 13 TSX subgroups, all but one were positive. Metals and mining proved the runaway winner, picking up 7.3%, followed by gold, up 3.8% and materials, ahead 3.2%.

The one loser was real-estate, and only 0.1% off at that.

The TSX Venture Exchange up 13.38 to 970.19 while the Nasdaq Canada Index added 20.54 points to 468.51

ON WALLSTREET

The Dow Jones Industrials average reversed early-day losses, to charge ahead 152.68 to 7,761.60

The S&P 500 index gained back 13.20 points to 811.07, while the Nasdaq picked up 23.01 points to 1,551.60.

The blue-chip indicator gained 7.7% during March, but fell 13.3% in the first quarter, its worst January-March showing since 1939.

Economically, the ADP National Employment Report said private sector employment dropped by 742,000 in March. The figure was higher than anticipated, and a rattling sign ahead of the Labour Department's non-farm payrolls report coming out on Friday.

Economists had forecast a loss of about 650,000 jobs during the month.

Other economic data beat expectations.

The U.S. Commerce Department said February construction activity dropped 0.9%, better than the 1.5% decline economists expected. The weakness in February reflected a 4.3% drop in housing construction, which pushed the level down to the lowest in 11 years.

The U.S. industrial sector contracted for a 14th consecutive month in March as the Institute for Supply Management reported its manufacturing index rose to 36.3 in March from 35.8 in February. Economists expected the index to rise slightly to 36.

The future of General Motors Corp. was also in focus after the New York Times reported that the U.S. government may seek to push GM into what it calls a "controlled" bankruptcy by persuading at least some creditors to agree to a plan that would split the company in two.

The future of domestic auto makers was also front and centre as March sales figures were released.

General Motors Corp. said its March sales fell 44.7% from a year ago to 155,334. Ford Motor Co. sales fell nearly 41% in March to 131,102 cars and light trucks. Chrysler LLC sustained a 39% drop to 101,001 cars and trucks. Toyota Motor said sales fell 39% and Honda Motor said sales fell 36%.

Despite the declines, GM, Ford and Toyota all posted double-digit improvements from February, when the U.S. sales overall hit their lowest point in more than 27 years.

Auto maker stock improved after the sales figures came out and GM added three cents to $1.97 U.S. in New York while Ford Motor Co. shares were up eight cents to $2.71 U.S.

Diversified manufacturer 3M said it was cutting 1,200 jobs worldwide in the first quarter, or 1.5% of its workforce. Shares of the Dow component rose 2%.

Investor attention is also fixed on the G20 summit of world leaders in London.

U.S. President Barack Obama said that he was "absolutely confident" that the meeting of rich and emerging countries would find consensus to reach a deal to help pull the world out of deep recession.

But French President Nicolas Sarkozy warned that neither his country nor Germany would align with "false compromises," suggesting that final agreement on what do to was still being worked out.

Washington has pushed for other governments to pump more money into economic stimulus programs, but many European countries have instead promoted a focus on tighter regulation to rein in financial market excesses.

Treasury prices rose, lowering the yield on the benchmark 10-year note to 2.65% from 2.68% Tuesday. Treasury prices and yields move in opposite directions.

U.S. light crude oil for May delivery settled down $1.27 to $48.39 U.S. a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery rose $2.70 to settle at $927.70 U.S. an ounce.