Europe hammers out deal, markets rejoice
Thursday, October 27, 2011 11:6 AM EST Europe hammers out deal, markets rejoice RIM, Bombardier in focus Toronto's main stock index leaped from the gate soon after Thursday’s opening bell, driven by investor relief that European policymakers reached a deal aimed at halting the region's two-year old debt crisis. The S&P/TSX composite index ballooned 215.67 points, or 1.8%, mid-morning to 12,401.73 The Canadian dollar achieved parity and then some with its American counterpart, gaining 0.81 cents to 100.43 cents U.S. The deal included a plan to leverage the bloc's rescue fund to one trillion euros, a 50% haircut for private holders of Greek debt and recapitalization of banks. Canadian stocks to watch this morning include Potash Corp., who said that its third-quarter profit more than doubled, as strong grain prices boosted demand for its crop nutrient products. Barrick Gold reported a 45% increase in its quarterly profit on Thursday, driven by a sharp increase in bullion prices. Consumers in the United States and Canada have sued Research In Motion for a days-long service outage on BlackBerry devices that rippled across the world earlier this month. Goldcorp Inc. said on Wednesday its third-quarter operating earnings rose 10.2%, driven largely by a sharp increase in the price of gold. Bombardier Inc. said on Wednesday that an unnamed Chinese airline has tentatively agreed to buy six of its CRJ900 NextGen regional commercial aircraft. Teck Resources said its third-quarter net income more than doubled, driven largely by strong results from its coal and copper businesses. Oil sands producer Cenovus Energy Inc. posted a 73% rise in third-quarter profit on higher production and crude prices. Agnico-Eagle Mines reported a third-quarter net loss on Wednesday, as its results were hurt by a large charge related to the writeoff of its investment in the Goldex mine in Quebec. On economic matters, Statistics Canada said this morning average weekly non-farm earnings jumped 0.8% from July to $877.28 in August, following two months of slightly backtracking. ON BAYSTREET The TSX Venture Exchange vaulted 28.29 points to 1,599.09 while the Nasdaq Canada index grew 7.05 points to 435.83 All 14 Toronto subgroups were positive at the outset. Metals and mining jumped 5.8%, while global base metals spiked 4.4%, and energy gained 2.7%. ON WALLSTREET In New York, stocks rallied right out of the gate Thursday, with all three major indexes jumping 2%, after European Union leaders agreed to expand Europe's bailout fund and take major losses on Greek bonds. The Dow Jones Industrials screamed higher 242.90 points, or 2.1%, to 12,111.90 The S&P 500 gained 27.67 points to 1,269.67, while the Nasdaq Composite Index gathered 55.25 points to 2,705.92. The rally pushed the S&P 500 into positive territory for the year for the first time since August 4. The euro-zone debt agreement came early Thursday, at the end of marathon talks aimed at finding solutions to Europe's debt and banking crisis. The euro rallied 1.5% versus the dollar and world markets jumped on the news, led by the financial sector. Shares of Credit Agricole, BNP Paribas and Societe Generale rose about 20% in Paris. In Germany, Deutsche Bank shares climbed more than 14%. Financial stocks were also leading the way in U.S. trading. Shares of Morgan Stanley spiked more than 11%, after being beaten down amid fears that the bank could suffer big collateral damage due to its exposure to French banks that have big ties to Greece. Citigroup, Goldman Sachs, Bank of America and JPMorgan Chase rallied more than 6%. U.S. stocks closed higher Wednesday, as investors became increasingly confident that European leaders would seal a deal to address the debt crisis. Shares of Exxon Mobil rose after the energy giant posted a quarterly profit of $10.3 billion U.S., a 41% increase from a year ago, thanks to higher oil and gas prices. Citrix shares jumped, leading the gains on the S&P 500 and Nasdaq. The virtual computing company delivered earnings and a forecast above Wall Street's expectations. Shares of Akamai Technologies were also sharply higher after the company posted earnings above estimates and issued a solid outlook. The company also said that its president David Kenny had resigned. Procter & Gamble shares were slightly lower, after the company said its quarterly profit slipped 2% from a year ago, making P&G the only declining stock among the Dow's 30 components. On the economic front, the U.S. government reported that third-quarter gross domestic product -- the broadest measure of a country's economic activity -- increased at an annual rate of 2.5%. The pace of growth was in line with expectations, and was nearly double the 1.3% growth rate in the second quarter. The U.S. Labor Department said weekly jobless claims eased by 2,000 to 402,000 last week -- also in line with expectations. The price on the benchmark 10-year U.S. Treasury lost ground, raising the yield to 2.28% from 2.20% late Wednesday. Treasury prices and yields move in opposite directions. Oil for October delivery prospered $2.92 to $93.13 U.S. a barrel Gold futures for December were flat around $1,723 U.S. an ounce
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