CP: Energy stocks send TSX higher; N.Y, mixed on earnings, economic data
TORONTO — The Toronto stock market bounded ahead more than 100 points Thursday following two days of steep losses caused by growing worries about the global economy.
New York markets were mixed on weak earnings news and signs of growing unemployment. Toronto's S&P/TSX composite index ran ahead 120.54 points to 9,357.42, after sliding 559 points in the previous session.
The TSX financial sector lost early traction to move down 0.35 per cent after Finance Minister Jim Flaherty announced the creation of a Canadian Lenders Assurance Facility, guaranteeing wholesale borrowing by the country's banks.
Flaherty said the temporary program will support the banks "on commercial terms so there is no expected cost to Canadian taxpayers," while stressing that Canada's lending institutions are solid and "the Canadian housing market is sound."
Despite the announcement, bank shares were mixed, with CIBC (TSX:CM) gaining 84 cents to $54.87 but Scotiabank (TSX:BNS) down $1.30 to $39.80.
It has been a punishing week for the Toronto stock market with the main index down more than 1,000 points in the past two days, taking it down 33 per cent since the beginning of the year.
Worries about faltering economies and tumbling commodity prices continued to force the Canadian dollar lower. The currency was down 0.28 cent to 79.42 cents US after falling 2.69 cents Wednesday to a three-year low.
The TSX Venture Exchange moved down 6.35 points to 894.28.
New York's Dow Jones industrial average gained 41.42 points to 8,560.63 after losing 514 points Wednesday.
The Nasdaq composite moved down 4.82 points to 1,610.93 while the S&P 500 added 2.26 points to 899.04.
Positive earnings news helped support the TSX as Potash Corp. of Saskatchewan (TSX:POT) reported a profit of $1.24 billion in the July-September period - more than in all of 2007, its best full year to date. PotashCorp shares were up $1.02 to $84.26.
EnCana Corp. (TSX:ECA) rose $3.69 to $54.43 after third-quarter net earnings of US$3.55 billion, up from $934 million a year ago. But that was largely thanks to a $2-billion unrealized hedging gain caused by declining natural gas prices.
Petro-Canada (TSX:PCA) moved ahead $1.97 to $27.38 as it reported a third-quarter profit of $1.25 billion, up 61 per cent from a year ago.
But the resource-industry bonanza of recent years is widely seen as history, with commodity prices pulling back in the face of shaky worldwide demand and global financial turmoil.
Crude oil bounced up $1.10 at US$67.85 a barrel on the New York Mercantile Exchange after dropping by more than $5 on Wednesday.
The bump up in oil prices comes a day before the Organization of Petroleum Exporting Countries is expected to decide on a hefty production cut in an effort to prop up prices.
The TSX energy sector was up 3.8 per cent.
The gold sector was five per cent higher even as bullion continued its retreat, down $13.30 at US$721.90 an ounce on the Nymex. Barrick Gold Corp. (TSX:ABX) was up $1.55 to $26.20 while Goldcorp Inc. (TSX:G) advanced $1.45 to $22.05
The base metals sector was off one per cent as the December copper contract in New York declined seven cents at US$1.79 a pound. Teck Cominco Ltd. (TCK.B) lost 14 cents to $14.18 while First Quantum Minerals (TSX;GM) slid $1.61 to $19.80.
In U.S. earnings news, Amazon.com said its profit climbed 48 per cent in the third quarter, but the company reduced its full-year sales outlook and its shares shed $4.28 to US$45.71.
German automaker Daimler AG reversed a year-ago loss to post a third-quarter profit of US$27.3 million but reported a fall in North American sales and abandoned its 2008 earnings forecast.
Dow Chemical said its profit rose six per cent in the third quarter, helped by price hikes that offset a nearly 50 per cent increase in raw-material and energy costs. Its shares rose $1.67 to $23.78 as it also predicted a global recession through much of next year.
Glum U.S. jobless news discouraged traders. Claims for jobless benefits increased last week by 15,000 to 478,000, slightly above analyst expectations as companies cut workers in a slowing economy.
In global equity markets, mixed corporate earnings are stirring intense anxiety about the economy.
Japan's Nikkei stock average fell 2.5 per cent overnight, and the gloom continued in European trading.
London's FTSE 100 index was down 68.92 points or 1.7 per cent to 3,971.97, while the German DAX lost 3.5 per cent and the Paris CAC-40 fell two per cent.
