Feb. 10, 2009 (Baystreet.ca) --
12:25 pm EST
Equity markets found themselves traveling in opposite directions by the midday break Thursday, with Toronto gaining back some of the ground it lost over two bruising days.
A conference going on between Prime Minister Stephen Harper and U.S. President Barack Obama may also have helped improve the mood, at least in Canada.
New York markets slid into negative country by noon, due in part to a weak earnings report from computer/printer company Hewlett-Packard Co.
The S&P TSX Composite Index was ahead 80.64 points by early afternoon to 8,256.59, largely on the strength of surging energy and base metals stocks.
Among energy stocks, Petro-Canada rose 89 cents to $27 and EnCana Corp. gained $1.02 to $50.42.
The financial sector was ahead as European banks said Thursday that they were finally ready to clear credit default swaps in Europe, in an effort to avoid extra European Union legislation over the derivatives that were partly blamed for the financial crisis.
Swaps offer insurance against securities for lenders worried about a borrower's ability to pay them back. The unregulated $60-trillion U.S. market has been operating without a central clearing house to handle the deals since the September collapse of U.S. investment bank Lehman Bros.
Royal Bank gained 74 cents to $27.72 while Bank of Montreal climbed 52 cents to $27.12.
The base metals sector ran up as Teck Cominco Ltd. improved 16 cents to $4.31.
Cameco Corp. shares were down $1.20 to $17.92 after the uranium miner said it is raising between $400 million and $460 million in an issue of new common stock "to strengthen its capital position and enhance its financial flexibility to allow it to take advantage of opportunities that may emerge from the current industry environment."
Among gold stocks, shares in Goldcorp Inc. were down 15 cents at $40.68 as the miner ended 2008 with its biggest-ever quarterly gold production and a 7% year-over-year increase in reserves, while booking fourth-quarter net income of $958.1 million U.S. thanks to a $985.7-million non-cash foreign exchange gain on revalued future tax liabilities.
In other earnings news, Silver Wheaton Corp. said Thursday that writedowns on long-term investments led the company to a fourth-quarter loss of $54.2 million U.S., reversing year-earlier profits of $24.9 million. Its shares lost 46 cents to $8.84.
The company, which describes itself as the largest publicly traded pure-play silver producer, reported quarterly sales of 2.7 million ounces of silver, down from 3.5 million ounces sold a year earlier.
In economic news, Canada Mortgage and Housing Corp. says housing starts fell 7.5% to about 211,056 units in 2008 from 2007.
But the agency forecast sharply lower levels of starts for the next two years and sliding home sales as the recession further discourages consumer confidence, with starts expected to be about 160,250 for 2009 and about 163,350 for 2010 followed by some improvement.
CMHC also said that existing home sales, as measured by the Multiple Listing Service, are expected to decline 14.6% during 2009 while the average price will slide 5.2%.
Statistics Canada's leading indicator composite index accelerated to 0.8% in January from 0.5% in December – the largest and most widespread decrease since the index began its decline in September.
The housing index contracted by 7% in January, its largest monthly decline since June 1990.
Still, consumer spending expanded, while furniture and appliance purchases rose, despite the slump in housing demand.
The Canadian dollar gained 0.1 cents to 79.50 cents U.S.
BAYSTREET
Of the 13 TSX sub-groups, 10 were ahead, energy stocks still in charge, up 3.3%, metals and mining up 2.6%, health-care gaining 1.8%.
The three laggards included gold, off 2.1%, information technology, down 1%, and materials, slumping 0.2%.
The TSX Venture Exchange improved 1.71 points to 917.53 while the NASDAQ Canada index slid 3.84 points, to 435.56
ON WALLSTREET
The Dow Jones industrials index was down 34.17 points by noon to 7,521.56. The Standard & Poor's 500 index was 0.94 points down to 787.48, while the NASDAQ composite index gave back 7.85 points to 1,460.12.
Stateside, Hewlett-Packard shares fell $2.31 to $31.77 U.S. after it said Wednesday that its profit dropped 13% to $1.85 billion U.S. in the latest quarter, dragged down by weakness in all major business lines except services, a division HP bulked up with its $13.9 billion U.S. acquisition of Electronic Data Systems last year.
Sales ticked up just 1% to $28.8 billion U.S., more than $3 billion short of analyst estimates.
Things aren't expected to improve soon.
HP, the world's top seller of personal computers, also cut its 2009 guidance, but it was still in line with Wall Street's expectations.
Sprint Nextel reported a quarterly loss and said 1.3 million subscribers ditched its mobile phone service. But the loss narrowed from a year ago and was smaller than analysts had expected.
Revenue fell from a year ago and was shy of expectations. Investors focused on the positive and the stock rose 14%.
Investors also took in data showing jobless insurance claims for last week coming in around expectations and unchanged from the previous week at 627,000.
Wholesale inflation prices advanced more than expected last month, partly as a result of higher energy costs. The Producer Price Index (PPI) rose 0.8% after falling 1.9% in December.
Economists thought it would rise 0.3%. The so-called core PPI, which strips out volatile food and energy prices, rose 0.4% after rising 0.2% in December. Economists thought it would rise just 0.1%.
Treasury prices slipped, raising the yield on the benchmark 10-year note to 2.83% from 2.75% Wednesday. Treasury prices and yields move in opposite directions.
U.S. light crude oil for March delivery rose 92 cents to $35.54 U.S. a barrel on the New York Mercantile Exchange.
COMEX gold for April delivery rose $3.80 to $982 U.S. an ounce.