Mar. 4, 2009 (Baystreet.ca) --
10:25 am EST
Equity traders were chomping at the bit to begin the day, and the loud surge in prices provided evidence of that feeling early Wednesday.
Investors brushed aside disappointing earnings from retailing giant Costco Corp. and an indicator of huge U.S. job losses last month.
Instead, they preferred to pin hopes on China amid speculation the country's leaders would unveil new initiatives to bolster the world's third-largest economy at a legislative meeting that opens tomorrow.
Toronto's S&P/TSX composite index charged out of the gate ahead 140.97 points in the first half-hour, to 7,772.59
Also helping sentiment were figures suggesting Chinese manufacturing, while contracting again in February, did so at a slower rate than the previous month.
Hartford Financial Services Group Inc., hammered by three credit-rating downgrades and a 72% stock drop this year, is in talks to sell most of its unprofitable life insurance unit to Canada's Sun Life Financial Inc., according to sources. Shares in Sun Life were down 80 cents, or 4.6% at $16.64.
New Gold Inc., the Canadian miner that produces precious metal in Mexico and Australia, agreed to buy Western Goldfields Inc. for about $314.6 million to gain the Mesquite mine in California.
Shares in New Gold were off 18 cents, or 7.8%, at $2.12.
In economic news, Tuesday's Bank of Canada decision to cut interest rates to almost zero and consider extraordinary steps to boost credit raises new concerns that the country's recession won't be as mild and short as policy makers predicted.
Governor Mark Carney yesterday lowered the rate on overnight loans between commercial banks to 0.5% from 1% and said he may reduce it again. Canada's economy shrank at a 3.4% annual pace in the fourth quarter, the most since 1991 and more than the 2.3% drop the bank had predicted.
The Canadian dollar gained 0.56 at 77.89 cents U.S.
BAYSTREET
For a change, all of the 13 TSX sub-groups were higher, climbing on the back of the metals and mining sector, which danced ahead 5.3%, followed by a 4.3% surge in energy stocks and a 2.4% improvement in industrials.
The TSX Venture Exchange was up 4.52 points to 828.59 while the Nasdaq Canada index picked 16.43 points to 402.81
ON WALLSTREET
The Dow Jones Industrials index leaped 91.52 to begin the day, to 6,817.54, shaking off the bruises from yet another 12-year low, to which it sank Tuesday. The blue-chip index is back at 1997 levels after insurer American International Group shocked markets Monday with a $62-billion U.S. quarterly loss.
The Standard & Poor's 500 index pulled itself together to gain nine points to 705.38, out of the abyss of a 12-year low, while the NASDAQ composite index advanced 20.08 points to 1,341.09.
Retailer Costco posted a 27% drop in profits, which it attributed to an overall weak economy.
Luxury home builder Toll Brothers said its losses narrowed in the quarter, although they still came in slightly worse than estimates.
Economically speaking, news on the job front was mixed.
Payroll services company ADP said the private sector shed 697,000 jobs in February, much more than expected. But the outplacement group Challenger, Gray and Christmas said the number of planned job cuts announced in the month fell for the first time since December.
The two jobs reports serve as a preface for the government's February data due Friday.
At 10:30 a.m. ET, the government reports on oil inventories for last week. And, at 2 p.m. ET, the Federal Reserve issues its "beige book" report on economic conditions around the nation.
The April crude contract in New York rose $2.60 to $46.85 U.S. a barrel.
Gold prices were off a dime at $913.50 U.S.