NS: TSX finds strength from a soaring gold price, U.S. retail sales data
TORONTO - The Toronto stock market moved higher at mid-morning Tuesday, finding strength from a soaring gold price and better-than-expected U.S. retail sales data.
The S&P/TSX composite index gained 66.75 points to 12,216.61, while the TSX Venture Exchange added 17.40 points to 1,622.97.
Gold stocks jumped, gaining 3.6 per cent as the December bullion contract on the New York Mercantile Exchange soared $22.70 to US$1,269.80 an ounce. Shares in Barrick Gold Corp. (TSX:ABX) gained $1.44 or 3.2 per cent to C$46.84.
The safe-haven investment gained ground after fresh data from Europe pointed to a lethargic global economy. Eurostat, the EU's statistics office, said industrial production in the eurozone was flat in July, against expectations for a modest increase, and a survey of German investor sentiment was much weaker than expected.
The TSX also got a boost from news that U.S. retail sales rose 0.4 per cent last month, the best advance since March. Economists had expected a slightly smaller increase of 0.3 per cent.
Excluding a big decline in autos, sales increased 0.6 per cent — double the amount economists had expected, the U.S. Commerce Department reported. This indicates the economy of Canada's biggest trading partner may not be heading into a dip recession as some had feared.
Data over the past two weeks have regularly beaten relatively modest forecasts and reduced fears the economy will fall back into recession. The Dow Jones industrial average has gained 5.3 per cent so far this month, while the TSX is up about two per cent.
The October crude contract edged up four cents to US$77.23 a barrel. The Toronto energy sector fell 0.3 per cent.
Shares in Enbridge Inc. (TSX:ENB) lost one cent to C$51.87 after the company announced it's investigating the possibility of an oil pipeline leak near Buffalo, N.Y. If a leak is confirmed, it would be the Calgary-based company's third spill in as many months.
The base metals sector lost 0.2 per cent following a 4.5 per cent jump on Monday. The December copper contract fell two cents to US$3.46 a pound. Shares in Teck Resources Ltd. (TSX:TCK.B) gained six cents to C$40.74.
The financial sector was flat. Shares in Toronto-Dominion Bank (TSX:TD) added 39 cents to $76.34.
The Canadian dollar edged up 0.11 of a cent to 97.45 cents US after Statistics Canada reported that the labour productivity of Canadian businesses fell 0.8 per cent in the second quarter following gains in the previous two quarters.
The agency said the productivity decline reflected a slowdown in business output combined with a rise in hours worked.
In New York, stock futures were unable to find traction following the retail sales data. The Dow Jones industrial average fell 5.30 points to 10,538.83. The Nasdaq composite index was down 1.62 points at 2,284.09, while the S&P 500 lost 1.85 points to 1,120.05.
In corporate news, discount retailer Dollarama Inc. (TSX:DOL) said its second-quarter net income fell 21 per cent to $21 million due to the impact of foreign exchange, but overall sales were up 13 per cent from the same time last year. Dollarama shares added two cents to $26.97.
Shares in DiagnoCure Inc. (TSX:CUR), a diagnostic test and laboratory services provider, fell five cents or 4.2 per cent to $1.13 after the Quebec-based company booked a loss of $1.7 million in the May-July period, shrinking a year-earlier loss of $4 million. Revenue fell 10 per cent.
Kirkland Lake Gold Inc. (TSX:KGI) reported net income of $3.3 million in its first quarter of fiscal 2011, more than double its year-ago profit of $1.6 million. Shares in the gold miner gained 31 cents or 3.9 per cent to $8.28.
Montreal coffee services company Van Houtte is being sold again just three years after being taken private by an American private equity firm, this time to Vermont-based Green Mountain Coffee Roasters Inc. for $915 million.
And Danish toy giant Lego has lost a final trademark ruling in European Court against Canada's Mega Brands (TSX:MB). Both companies make plastic building blocks and Lego has been trying to prevent its competitor from using a similar design. Shares in Mega Brands added one cent to 49 cents.
Overseas, European stock markets searched for direction following disappointing economic data. Britain's FTSE 100 fell 0.2 per cent, Germany's DAX index lost 0.2 per cent, and France's CAC-40 also lost 0.2 per cent. Japan's Nikkei stock average fell 0.2 per cent, while Hong Kong's Hang Seng index rose 0.2 per cent.
