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Jan. 25, 2010 (Baystreet.ca) --
The Toronto stock market was slightly higher Monday afternoon as investors dealt with major doses of uncertainty that sent indexes tumbling last week.
The S&P/TSX Composite Index backed off its highs of the day, but still finished ahead 11.08 points to 11,354.51, after a plan put forward by U.S. President Barack Obama to curb bank risk, along with Chinese moves to slow bank lending, pushed the Toronto market down almost 3% last week.
The tech sector gained, as Celestica Inc. picked up 26 cents to $9.89 ahead of earnings coming out Wednesday.
The energy sector rose as Imperial Oil rose 22 cents to $39.30 while Canadian Oil Sands Trust advanced 28 cents to $28.61.
The proposed new banking regulations punished bank stocks around the world and pushed the TSX financial index down about 3.2% last week. But the sector revived somewhat Monday, as Scotiabank gained 44 cents to $45.04 while TD Bank climbed 63 cents to $62.38.
The base metals sector moved down on top of last week's slide of about 6% even as the March contract for copper rose four cents to $3.39 U.S. Teck Resources climbed 44 cents to $39.21 but Labrador Iron Mines Holdings fell 65 cents to $5.80.
The gold sector dipped, as Barrick Gold Corp. faded 45 cents to $38.21.
The earnings season also gains momentum in Canada where market heavyweights such as grocer Metro Inc., Canadian National Railways, Canadian Pacific Railway and Potash Corp. deliver earnings this week.
In corporate news, Kingsway Financial Services Inc. has agreed to sell its shares of Jevco Insurance Co. to Westaim Corp. of Calgary in a proposed deal worth about $263 million. Kingsway shares jumped 34 cents or 22.4% to $1.86 while Westaim jumped 7.5 cents or 17.2% to 51 cents.
The Toronto Stock Exchange said it was reviewing the shares of Montreal-based toy maker Mega Brands for possible delisting, and the company had 120 days to regain compliance with listing requirements. Mega Brands is in the midst of a recapitalization plan that eliminates nearly $300 million of debt. Its shares lost five cents to 61 cents.
DualEx Energy International Inc. stock lost more than half its value Monday after the company announced it would abandon its Al Tayr 101 well in Syria after an unsuccessful testing program. The stock fell 23.5 cents or 55.3% to 19 cents with more than 1.6 million shares traded on the TSX Venture Exchange.
With no major economic data on tap today, traders will look the movements in commodities prices to get clues.
The Canadian dollar skidded 0.02 cents to 94.50 cents U.S.
ON BAYSTREET
Of the 14 TSX subgroups, nine were in positive country at the close. Information technology surged 1%, while global base metals advanced 0.9%, and real-estate issues gained 0.7%.
The five laggards were weighed mostly by gold's 1.1% decline, while materials lost 0.8%, and the metals and mining group eased 0.7%.
The TSX Venture Exchange faded 2.82 points to 1,546.85, while the Nasdaq Canada index fell 2.84 points to 681.90.
ON WALLSTREET
In New York, equities managed slim gains Monday as investors weighed recent worries about the bank sector and the likelihood of Federal Reserve Chairman Ben Bernanke serving for a second term. A weaker-than-expected housing market report put a lid on gains.
The Dow Jones Industrials grew 23.88 to 10,196.86. The S&P 500 was 5.02 points better to 1.096.78, and the Nasdaq regained 5.51 points to 2,210.80.
Gains in large bank stocks, techs and big industrial firms helped lead the advance, with 24 of 30 Dow components rising. The biggest advancers were IBM, Hewlett-Packard, Travelers 3M, Chevron and Caterpillar.
Stocks plunged last week after the White House proposed new limits on banks and talk swirled that Federal Reserve Chairman Ben Bernanke's term may not be renewed. In three sessions, the Dow, S&P 500 and Nasdaq all slumped 5%.
But those worries were tempered Monday at the start of a busy week for economic and earnings news. This week brings the Federal Reserve policy-setting meeting, the first reading on fourth-quarter GDP growth, the president's State of the Union address and profit reports from a slew of major companies. Apple reports after the close Monday.
The market is bound to walk a narrow path this week, especially through Wednesday, which brings the conclusion of the Fed meeting and the president's State of the Union speech.
One expert said that investors are acknowledging Monday that the economy is still making a slow recovery, fourth-quarter earnings have been looking strong, and that Obama's bank plan may not gain approval from Congress. Additionally, the 5% selloff in three days was giving investors a chance to dip back into stocks Monday.
The Dow's weekly loss of 4.1% was the worst since the week ended March 6, 2009, when it closed at a 12-year low and the market hit bottom. Since then, the Dow had risen 57% as of Friday's close.
On Friday, the VIX, the market's fear gauge, spiked at a six-month high as investors worried that a bigger selloff was brewing. But on Monday, the VIX was back down 8%.
Amid ongoing questions about whether Bernanke's term will be renewed, the central bank is meeting to discuss interest rate policy. Bankers meet Tuesday and Wednesday and are widely expected to opt to keep interest rates steady at historic lows near zero.
Although the bank isn't likely to say much, investors will still scour the statement for hints about when the Fed plans to start raising interest rates or withdrawing some of the trillions in stimulus dollars it has put into the system.
Sustained low interest rates and the increase of money in the system are seen as among the main reasons why the economy didn't crater and the stock market was able to bounce back last year.
Sales of existing homes fell to a 5.45-million-unit annual rate in December from a rate of 6.54 million units in November, according to a National Association of Realtors report released in the morning. Economists surveyed by Briefing.com thought it would fall to a 5.9-million-unit rate.
Treasury prices slid, raising the yield on the 10-year note to 3.63% from Friday's 3.59%. Treasury prices and yields move in opposite directions.
The price of a barrel of oil climbed 60 cents to $75.14 U.S.
Gold prices regained seven dollars to $1,096 U.S.