Feb. 9, 2009 (Baystreet.ca) --
12:35 pm EST
Markets in North America went in opposite directions by midday Monday, amid uncertainty over the ongoing U.S. economic stimulus debate and a delay in the announcement of the bank bailout plan.
The S&P TSX Composite Index had surged 112.90 points by noon to 9,120.92
The TSX financial sector was up 1.3% ahead of the announcement on the proposed bailout by U.S. Treasury Secretary Timothy Geithner with Scotiabank up 60 cents to $31.18 and TD Bank climbed 70 cents to $40.50.
Kingsway Financial Services Inc. shares tumbled $1 or 16% to $5.25 after the company said it is quitting some lines of business, eliminating 750 jobs and selling assets, including its common-share equity portfolio, while warning of a "material" fourth-quarter loss.
The TSX energy sector led this upward growth as EnCana Corp. rose $1.82 to $58.13 and Suncor Inc. advanced $1.38 to $26.87.
Precision Drilling Trust units were well off early lows, up two cents to $4.97 after going as low as $4.32 following an announcement from Canada's largest oil and gas driller that it is indefinitely suspended distributions as the recession undermines demand for its services declines.
Elsewhere in the oilpatch, the board of UTS Energy Corp. urged shareholders to reject Total E&P Canada's "inadequate" $617-million offer to acquire the Calgary oil sands operator. UTS shares gained seven cents to $1.77.
The base metals sector rose with Sherritt International 14 cents higher to $2.93 and shares in Teck Cominco Ltd. were up 39 cents to $5.68 even as Moody's Investors Service on Friday lowered the miner's debt ratings and revised the outlook to negative.
The gold sector fell as Barrick Gold Corp. faded $1.72 to $46.28.
The Canadian dollar jumped 0.48 cents to $82.10 cents U.S., as Canada Mortgage and Housing Corp. reported a bigger than expected drop in housing starts last month. CMHC said the seasonally adjusted annual rate of housing starts declined to 153,500 units in January from 172,200 in December.
Economists were expecting starts to come in at 169,000 but CMHC said reduced sales and increased listings of existing homes reduced demand for new dwellings.
BAYSTREET
Of the 13 TSX sub-groups, 11 were moving ahead, led by energy stocks, up 3.9%, metals and mining stocks were next, ahead 2.9%, and real estate, advancing 2.2%.
Gold stocks were down 3.1% and materials slipped 0.7%, and so it was for the laggards.
The TSX Venture Exchange had gained 0.73 points to 910.07, while the NASDAQ Canada index was ahead 4.32, at 580.02
ON WALLSTREET
The Dow Jones industrials index slipped back into negative territory 17.29 points by to 8,263.30. The Standard & Poor's 500 index inched back 1.01 to 867.59. The NASDAQ composite index faded 3.51 points to 1,588.20
The Senate's compromise stimulus measure will be debated on the floor Monday, with a vote scheduled Tuesday. Should it pass, there would be a House-Senate conference to reconcile the two versions of stimulus the administration seeks.
The conference would have to move quickly if lawmakers are to achieve their goal of getting final legislation to President Obama's desk by Presidents Day, next Monday.
As for the bank bailout, the Treasury Department announced over the weekend that Geithner will unveil his plan Tuesday - one day later than scheduled, in order to focus on the stimulus package in the Senate. Geithner is scheduled to reveal how the Obama administration plans to use the remaining $350 billion of the Treasury's $700-billion U.S. Troubled Asset Relief Program (TARP).
DreamWorks SKG, the movie company controlled by Steven Spielberg, severed its film distribution pact with General Electric's Universal Studios. The move put DreamWorks into advanced talks with Walt Disney for a deal that could lead to further production funding.
General Motors is in talks to buy back portions of auto parts maker Delphi, which was spun off by the automaker in the 1990s, according to a report in the Wall Street Journal. The paper said the deal would allow GM to qualify for further government bailout assistance.
Treasury prices slumped, raising the yield on the benchmark 10-year note to 3.03% from 2.98% Friday.
The March crude contract in New York rose $1.69 to $41.86 U.S. on hopes that oil has finally found a floor around the $40 U.S. level.
The April bullion contract in New York declined $15.40 to $898.50 U.S. an ounce.