TSX rockets on Europe deal
Thursday, October 27, 2011 05:30 PM EST TSX rockets on Europe deal Commodities shoot up 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 rose 215.35 points, or 2.3%, to 12,401.41 with all sectors positive. The Canadian dollar was off early highs but still up 0.94 of a cent to 100.46 cents U.S. as investors bought up riskier assets in the wake of the agreement. The currency has not closed above parity since Sept. 20. The energy sector rose as 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 handily. Teck stock gained $2.71 or 7.25% 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%. 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 U.S. 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 totaled $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 gained 30.07 points to 1,600.86, while the Nasdaq Canada index grew 15.82 points to 444.60 As mentioned, all 14 Toronto subgroups were positive on the day. Metals and mining jumped 7.7%, while global base metals spiked 6.4%, and information technology gained 3%. ON WALLSTREET In New York, stocks rallied right out of the gate Thursday, with the major indexes jumping about 3%, after European Union leaders agreed to expand Europe's bailout fund and take major losses on Greek bonds. The Dow Jones Industrials screamed higher 339.51 points, or 2.9%, to 12,208.50 The S&P 500 gained 42.59 points to 1,284.59, while the Nasdaq Composite Index gathered 87.96 points to 2,738.63. The day's rally pushed the S&P 500 into positive territory for the year for the first time since Aug. 4. The broad index is now on track for its best monthly performance since October 1974. 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 January 1987. The tech-heavy Nasdaq is on track for its biggest monthly gains since October 2002. Financial stocks were also leading the way in U.S. trading. Shares of Morgan Stanley spiked 17%, 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 between 8% and 10%. The market's fear gauge, the VIX, tumbled almost 15% Thursday to the lowest levels since early August. The measure has dropped more than 40% since the start of the month. Though investors are relieved, details about the deal remain dicey, said one expert, and the plan doesn't go far enough to tackle the structural problems that are hindering economic growth in the region. Shares of Exxon Mobil rose after the oil company posted a quarterly profit of $10.3 billion U.S., a 41% increase from a year earlier, 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. Meanwhile, shares of Avon Products tumbled, after the company said it is being investigated by the Securities and Exchange Commission for possibly bribing foreign officials. 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 dropped sharply, raising the yield to 2.40% from 2.20% late Wednesday. Treasury prices and yields move in opposite directions. Oil for October delivery prospered $3.63 to $93.83 U.S. a barrel Gold futures for December edged up $24.20 to $1,747.70 U.S. an ounce
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