TSX rides gold higher
Monday, November 07, 2011 00:24 PM EST TSX rides gold higher Italy provides new worry The Toronto stock market was led higher by gold stocks Monday morning as bullion prices made strides amid traders’ fears about Europe’s debt problems. The S&P/TSX composite index approached noon up 27.09 points to 12,435.34 The Canadian dollar strengthened 0.05 cents to 98.29 cents U.S. Worries about the state of Italy’s finances drove the price of gold up. On the TSX, shares in Barrick Gold Corp. added 49 cents to $52.72. Italy’s borrowing rates spiked Monday to their highest levels since the country adopted the euro. Markets fear that Italy’s debts are too large to be handled by an international bailout. In Canadian corporate news, RioCan Real Estate Investment Trust tripled its third-quarter net earnings to $168 million, or 63 cents per unit, up from $56 million or 23 cents per unit a year ago, on various acquisitions. Shares were up 15 cents to $25.07 on the TSX. Ensign Energy said its net profit in the latest quarter was $64 million or 52 cents per share in the three months ended Sept. 30. That was double the $32 million, or 21 cents per share, the company made in the same quarter a year ago. Its shares added 4.2% or 65 cents to $16 each. Cameco shares dropped 3.4% or 73 cents at $21.04 after it said its third-quarter profits dropped 60% to $39 million from $98 million a year earlier. On a per-share basis, earnings were 10 cents compared to 25 cents. Monday is a quiet day for economic reports in both Canada and the United States, although the Federal Reserve will report in the afternoon on how much American consumers borrowed in September. ON BAYSTREET The TSX Venture Exchange poked up 0.95 points to 1,650.96, while the Nasdaq Canada index slid 4.33 points to 424.60 Eight of the 14 Toronto subgroups were lower by midday. Metals and mining dove 1.9%, while health-care issues gave back 1.7% and global base metals dipped 1.2%. The half-dozen gainers were powered by gold, up 1.7%, materials, up 1%, and telecoms, advancing 0.5%. ON WALLSTREET In New York, stocks seesawed during morning trading as investors fret over the stability of Greece and Italy. The Dow Jones Industrials faltered 80.26 points by lunch time to 11,903 The S&P 500 regressed 10.29 points to 1,242.94, while the Nasdaq Composite Index tripped 28.33 points to 2,657.82. Shares of DISH Network surged after the company announced a one-time divided payment. The satellite provider also released earnings per share that missed estimates by two cents. Shares of daily deals site Groupon dropped Monday, after closing at $26.11 U.S. Friday -- roughly 31% above their initial offering price in the stock's public debut that morning. The market clearly wants to see the resignation of Italian Prime Minister Silvio Berlusconi, said one expert. Italian bond yields hit record highs Monday. Yields on Italian sovereign debt are inching dangerously close to the 7% mark, which is the level that triggered bailouts in Ireland and Portugal. Berlusconi on Monday denied reports that he was about to step down, after tens of thousands of protesters gathered in Rome over the weekend to decry his handling of the economy. Investors remain wary about the European debt crisis, after the Group of 20 summit in Cannes, France, last week failed to produce any tangible new solutions. Greek Prime Minister George Papandreou secured a deal to approve a bailout package during last week's meeting of global leaders, but talks yielded limited details. And while Greece has been the center of focus, investors are now turning their attention to the domino effect Greece's problems are likely to have on Italy. Mounting political uncertainty in Italy and Greece is also likely to add to volatility in the short term. Papandreou survived a confidence vote in Athens on Friday, but by Sunday, he was making plans to hand over the reins to a yet-unnamed new prime minister. Papandreou will meet with opposition leader Antonis Samaras Monday. After another week of wild swings, the Dow ended last week down 2%. The S&P 500 lost 2.5% for the week, and the Nasdaq dropped 1.9%. On the economic front, the Federal Reserve will release data on consumer credit for the month of September on Monday. Analysts surveyed by Briefing.com expect credit to have expanded by $5 billion U.S., after dropping by $9.5 billion U.S. in August. The price on the benchmark 10-year U.S. Treasury inched higher, lowering the yield to 1.98% from 2.05% late Friday. Treasury prices and yields move in opposite directions. Oil for October delivery gained 76 cents to $95.02 U.S. a barrel Gold futures for December delivery added $23.60 to $1,779.90 an ounce.
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