The Toronto stock market opened with a big gain Thursday as signs of growth in Europe offset some disappointing retail data and earnings results at home.
The S&P/TSX added 99.34 points to 11,612.67 after an index of the eurozone’s manufacturing and service sectors showed the recovery overseas is gaining traction.
The good news out of a region that has been a major source of worry for investors lately offset new data from Statistics Canada, which showed retail sales slipped 0.2 per cent to $36 billion in May, much lower than the 0.4 per cent gain that was anticipated.
The loonie added 0.58 cent to 96.03 cents US as oil prices jumped.
The Toronto energy sector climbed 0.7 per cent as the September crude contract on the New York Mercantile Exchange added $1.44 to US$78 a barrel. Shares in Suncor Energy Inc. (TSX:SU) added 29 cents to C$32.83.
The base metals sector jumped 2.8 per cent as the September copper saw another big gain, adding 6.75 cents to US$3.16 a pound. Since the beginning of the week, the price of copper has climbed more than 23 cents. Shares in Teck Resources Ltd. (TSX:TCK.B) added $1.07 to C$36.21.
Gold shares added 1.1 per cent as the August bullion contract lost $6.50 to US$1,185.30 an ounce. Stock in Barrick Gold Corp. (TSX:ABX) added 46 cents to C$44.26.
Financials climbed one per cent. Shares in CIBC (TSX:CM) gained 48 cents to $67.72.
The TSX Venture Exchange was up 10.09 points to 1,375.65.
In New York, markets also bounced back after a sell-off sent all major indexes lower on Wednesday.
The Dow Jones industrial average added 136.68 points to 10,257.21. The Nasdaq composite index was up 38.23 points at 2,225.56 while the S&P 500 index gained 17.28 points to 1,086.87.
This followed news that the eurozone’s purchasing managers index, which combines data for the manufacturing and service sectors, rose to 56.6 in July from 55.6 in June. Anything above 50 indicates expansion and the higher the figure, the greater the growth.
In recent months, investors worldwide have been concerned that mounting government debt in Europe would stall a global recovery. A jump in the index is welcome relief for those predicting contraction on the continent.
On top of this, a monthly 0.7 per cent increase in British retail sales in June was a lot more than anticipated.
The better-than-expected numbers out of Europe combined with strong earnings from key companies like Caterpillar, 3M, UPS and AT&T, which all topped profit forecasts and raised their outlooks. This offset news that weekly jobless claims in the U.S. jumped more than expected last week.
American markets will look to data on home sales and house prices later this morning.
Second-quarter earnings are also beginning to drift in from Canadian companies.
Canfor Pulp Income Fund (TSX:CFX.UN) said Wednesday it earned $22.1 million in its latest quarter, up from $4.4 million a year ago, and increased its monthly distribution. Units in Canfor climbed 42 cents or three per cent to C$14.47.
Forestry company Norbord Inc. (TSX:NBD) returned to profitability with net income of US$37 million as sales volumes and North American pricing improved along with the resurgence in construction activity. Shares in Norbord added $1 or 8.7 per cent to $12.50.
Calgary-based Precision Drilling Corp. (TSX:PD) reported a net loss of $67 million, surprising analysts who had expected a small profit. Shares in the company lost eight cents to $7.72.
The country’s largest grocery store operator, Loblaw Co. (TSX:L), said its second-quarter profit of $180 million was down nearly seven per cent compared with the same time last year. Shares in the company gained 51 cents to $41.93 in early trading.
And Canadian convenience-store operator Alimentation Couche-Tard Inc. (TSX:ATD.A) has increased its hostile offer for U.S. retailer Casey’s General Stores (Nasdaq:CASY) by 75 cents per share to US$1.9 billion including net debt. Shares in Couche-Tard were unchanged at $20.99.
Overseas, Britain’s FTSE 100 rose 1.1 per cent, Germany’s DAX index gained 1.7 per cent and France’s CAC-40 rose 1.9 per cent. Japan’s Nikkei stock average fell 0.6 per cent while Hong Kong’s Hang Seng index gained 0.5 per cent.
