TSX shoots up following Europe debt deal
Thursday, October 27, 2011 01:17 PM EST TSX shoots up following Europe debt deal Metals triumph The Toronto stock market surged Thursday as an agreement to deal with the euro-zone’s debt crisis pushed commodities higher and the resource sector produced some strong corporate earnings. The S&P/TSX composite index ballooned 245.85 points, or 2%, to greet lunch hour at 12,431.91 The Canadian dollar achieved parity and then some with its American counterpart, gaining 0.6 cents to 100.67 cents U.S. The currency has not closed above parity since Sept. 20. The resource-heavy TSX benefited from commodity prices which moved up smartly on expectations of higher demand. The energy sector rose 2.54 per cent as the December crude contract on the New York Mercantile Exchange gained $2.83 to US$93.03 a barrel. Suncor Energy was up $1.31 to $32.57. Imperial Oil gained 73 cents to $42.66 after third-quarter profit more than doubled to $859 million on strong performance from Cold Lake and higher production at the Syncrude oilsands property. Earnings per share of $1.01 handily beat estimates. Metal prices also surged with the December copper contract in New York up 18 cents to $3.67 U.S. a pound. A strong earnings report from Teck Resources also helped push the mining sector up Teck stock gained $2.71 or 7.25 per cent to $40.04 after the miner reported an adjusted third-quarter profit of $742 million, or $1.26 per share. The results were up sharply from $452 million, or 77 cents per share, a year ago. Record revenue of $3.4 billion in the third quarter was up 40 per cent. Teck also announced a 33% increase in its semi-annual dividend to 40 cents a share. Elsewhere in the group, First Quantum Minerals advanced $1.60 to $20.20. The financial sector also made a strong contribution to TSX gains. Scotiabank gained 97 cents to $52.55 and Manulife Financial climbed 60 cents to $13.62. Barrick Gold Corp.’s profits rose 45% to a record $1.37 billion in the third quarter, helped by the strength of gold prices. The company, which reports in U.S. dollars, says the results were equal to $1.37 per share, coming in above analyst expectations of $1.34 per share, according to Thomson Reuters. Its shares were ahead 69 cents at $48.88. In other earnings news, Potash Corp. of Saskatchewan Inc. more than doubled its profits in the latest quarter to $826 million U.S. or 94 cents a share on higher production and record sales. Its shares lost early momentum and moved down 44 cents to $49.31. Domtar Corp. reported third-quarter net earnings of $117 million U.S. or $2.95 per share, compared with $191 million U.S. a year ago. Sales revenue for the three months ended Sept. 30 totalled $1.42 billion, down from $1.47 billion. Its shares were ahead $1.75 to $80.19. Energy company Nexen Inc. earned $200 million or 38 cents a share for the quarter ended Sept. 30, beating estimates by seven cents a share. The company also said that ongoing political strife in Yemen may cause it to halt its long-running operations in the Middle Eastern country. Its shares were up 32 cents to $17.11. 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 32.34 points to 1,603.14 while the Nasdaq Canada index grew 15.82 points to 444.60 All but one of the 14 Toronto subgroups were positive midday. Metals and mining jumped 6.5%, while global base metals spiked 5.6%, and information technology gained 3.6%. Gold sank 0.3%, the lone loser. 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 294.90 points, or 2.5%, to 12,163.90 The S&P 500 gained 36.08 points to 1,278.08, while the Nasdaq Composite Index gathered 77.30 points to 2,727.97. The rally pushed the S&P 500 into positive territory for the year for the first time since August 4. The gains also pushed the Dow above the 12,000 mark for the first time since Aug. 1. The blue chip index is headed for its best month since August 1982. The euro rallied 1.8% 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 6% 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. U.S. stocks closed higher Wednesday, as investors became increasingly confident that European leaders would seal a deal to address the debt crisis. 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 2.31% from 2.20% late Wednesday. Treasury prices and yields move in opposite directions. Oil for October delivery prospered $3.24 to $93.44 U.S. a barrel Gold futures for December edged up $4.50 $1,728 U.S. an ounce
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