TH: TSX little changed amid higher oil, gold prices
TORONTO—The Toronto stock market was slightly higher Tuesday amid rising prices for oil and gold and ahead of the release of a key reading on American consumer confidence later in the morning.
The S&P/TSX composite index added 10.25 points to 12,585.04 while the TSX Venture Exchange rose 5.6 points to 1,586.99.
The Canadian dollar was down 0.02 of a cent to 100.87 cents US following a jump of about Âľ of a cent on Monday.
U.S. markets were positive amid other data which showed that U.S. home prices fell in January for a fifth straight month in most major U.S. cities, as modest sales increases have yet to boost prices.
The Standard & Poor’s/Case-Shiller home-price index shows prices dropped 0.8 per cent in January from December in 16 of 19 cities tracked.
The Dow Jones industrial average gained 15.48 points to 13,257.11.
The Nasdaq composite index was up 5.91 points to 3,128.48, and the S&P 500 index climbed 2.55 points to 1,419.06.
Markets in Toronto and New York netted strong gains and the greenback weakened Monday after U.S. Federal Reserve chairman Ben Bernanke said that the U.S. job market was still weak despite three months of job gains in excess of 200,000. Bernanke’s comments were a strong indication that the central bank is prepared to keep its low-interest rate policies in place for some time to come despite the recent signs of economic growth.
Traders also interpreted his remarks to suggest that the Fed could launch another round of buying bonds.
The Fed has already embarked on two rounds of bond-buying, most recently in late 2010, known as quantitative easing. The mere thought that a third round of bond-buying, dubbed QE3 by industry insiders, might be possible was all it took for markets to respond.
Commodity prices also responded positively to Bernanke’s comments. The May crude contract on the New York Mercantile Exchange added to Monday’s modest gain, up 18 cents to US$107.21 a barrel. The energy sector dipped 0.19 per cent with Cenovus Energy down 30 cents to $36.28.
The base metals sector was flat with copper prices were unchanged at US$3.89 a pound after jumping eight cents Monday. First Quantum Minerals dipped seven cents to $19.13.
The gold sector was also flat even as bullion prices added to Monday’s $23 rise, up $6.80 to US$1,692.40 an ounce. Iamgold faded eight cents to $13.26.
Tech stocks supported the TSX with MacDonald Dettwiler and Associates up 42 cents to $45.38.
Industrials also provided lift with Canadian Pacific Railway up nine cents to a fresh high of $79.11.
The railway is holding an investor day in Toronto. Executives hope to convince investors that they shouldn’t be replaced. CP’s largest shareholder, New York hedge fund Pershing Square Capital Management, has expressed displeasure with the railway’s performance in recent years. It is pushing to elect six proposed directors who are in favour of ousting current chief executive Fred Green and replacing him with Hunter Harrison, the former head of rival railroad Canadian National.
On the economic front, traders will also focus on the U.S. Conference Board’s latest take on consumer confidence. Economists expect little change in its index.
In corporate news, pipeline builder Enbridge Inc. is investing $3.8 billion in a new round of construction to bring oilsands crude to the U.S. Gulf coast and help ease a bottleneck that has led to a glut of supply in the Midwest. It will expand its Flanagan South Pipeline from Flanagan, Ill. to Cushing, Okla. to a 36-inch diameter line with a capacity of 585,000 barrels per day. Enbridge also said it will twin a jointly owned Seaway Pipeline from Cushing to the U.S. Gulf Coast at Houston. Enbridge shares gained 28 cents to $38.51.
Mining company Rio Tinto PLC says it is examining options for potentially disposing of its diamond businesses. Rio Tinto operates a diamond mine 300 kilometres northeast of Yellowknife. It also has mining operations in Australia and Zimbabwe and has a diamonds project in India. Harry Kenyon-Slaney, chief executive of the company’s diamonds and minerals division said the company was reviewing whether diamonds fit with its strategy of operating large, long-life, expandable assets.
British Columbia miner Copper Mountain Mining Corp. booked $44.7 million of revenue in its fourth quarter, bringing the total for the year to $66.5 million. It’s the first year that Copper Mountain has booked revenue from operations.
The Vancouver-based company had $5.6 million of net earnings attributable to shareholders, or six cents per share, for the quarter ended Dec 31. For the full year, the net loss was $12.7 million or 13 cents per share and its shares dropped 23 cents to $4.50.
European bourses were mixed with London’s FTSE 100 index down 0.05 per cent, Frankfurt’s DAX gained 0.58 per cent and the Paris CAC 40 slipped 0.27 per cent.
Asian stock markets posted solid gains overnight in the wake of Bernanke’s comments, led by Japan’s Nikkei 225 index. The benchmark jumped 2.4 per cent to close at 10,255.15, its highest finish since a devastating earthquake and tsunami on March 11, 2011.
South Korea’s Kospi rose one per cent, Hong Kong’s Hang Seng climbed 1.8 per cent and Australia’s S&P/ASX 200 added 0.9 per cent.
