AP: Stocks higher even as U.S. housing, consumer numbers add to economic pessimism
TORONTO - The Toronto stock market enjoyed an upward swing of about 500 points late Friday morning, in large part because energy stocks improved after oil prices put in some gains after three days of big losses.
New York markets were also headed higher as investors took in positive corporate earnings news as the latest American home construction and consumer data reminded investors of the depth of the economic slowdown.
Toronto's S&P/TSX composite index came back from a deficit of about 200 points to rise 203.04 points to 9,473.01.
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New York's Dow Jones industrial average was also off its worst levels, up a slight 2.78 points to 8,982.04 as the U.S. Commerce Department reported construction of new homes plunged by a bigger-than-expected 6.3 per cent in September.
There was another sign of sharply weakening consumer confidence as The University of Michigan's index of consumer sentiment fell to 57.5 from 70.3 in September.
Investors were pleased to see Google Inc. report a 26 per cent increase in third-quarter profit to US$1.35 billion, which surpassed analyst forecasts. The search engine's shares rose $25.03 to US$378.05.
And IBM Corp. said that its third-quarter profit jumped nearly 20 per cent to US$2.82 billion, surpassing analyst estimates, as the technology company overcame slumping hardware sales. IBM stock rose 54 cents to US$92.06.
The Canadian dollar edged up 0.03 cent to 84.69 cents US.
The TSX Venture Exchange inched up 0.37 of a point to 938.16.
New York's Nasdaq composite index was higher by 10.39 points to 1,728.1 while the S&P 500 index moved up 3.61 points to 950.04.
The showing comes at the end of an extremely volatile week where indexes have swooped hundreds of points in either direction as dismal readings on retail sales, industrial production and the overall economy depressed investors.
But credit markets are showing signs of a thaw following dramatic measures by governments in the U.S. and Europe to pump hundreds of billions of dollars into the banking sector.
"The only way to really explain how we got here, in terms of volatility, is that we have this big tug of war going on between massive government and central bank bailout initiatives in the trillions of dollars on the one side, which presumably helps the market, and this continued kind of push against that by retail investors who really don't want any part of this market until things settle down," said Andrew Pyle, wealth adviser at Scotia McLeod in Peterborough, Ont.
"And that's giving us these massive swings as we see daily now."
U.S. President George W. Bush defended the political interventions in the financial crisis, saying in a morning speech that they are measures of "last resort" that will ultimately restore the economy to stability.
He again cautioned that the government moves will not immediately heal the battered economy.
On the TSX, the energy sector was up 5.3 per cent after three days of oil-price declines that took crude below US$70 a barrel for the first time since August 2007.
The November crude contract on the New York Mercantile Exchange edged up $1.80 to US$73.45 a barrel on expectations the Organization of Petroleum Exporting Countries will move to cut production to support prices.
EnCana Corp. (TSX:ECA) advanced $2.69 to $49.19 and Suncor Inc. (TSX:SU) gained $1.62 to $25.82.
Bullion was down $21.30 at US$783.20 an ounce, taking the TSX gold sector down one per cent.
Goldcorp Inc. (TSX:G) faded 77 cents to $23.98.
The financial sector shook off early losses, rising 1.88 per cent as National Bank (TSX:NA) added $1.90 to $45.84 and Royal Bank (TSX:RY) improved 82 cents to $46.48.
In corporate news, the Priszm Income Fund (TSX:QSR.UN) suffered a 24 per cent shrinkage in summer-quarter net profit to $3.5 million as sales at its KFC, Taco Bell and Pizza Hut restaurants declined 1.9 per cent from a year earlier to $95.9 million. Priszm units ran ahead 24 cents to $1.71.
Allen-Vanguard Corp. (TSX:VRS) shares were up 55 cents or 24 per cent to 28.5 cents after the maker of high-hazard protective equipment announced a contract to provide specialized training to the U.S. Department of Defence worth as much as $100 million over five years.
In Asia, Hong Kong's Hang Seng index dropped 4.4 per cent to its lowest level in almost three years, but Japan's Nikkei average rose 2.8 per cent after falling 11.4 per cent Thursday.
The FTSE index was up 180.9 points or 4.68 per cent to 4,042.29 in London, while Germany's DAX rose 3.3 per cent and the French CAC-40 added 4.1 per cent.
