TSX higher as gold climbs
Monday, November 07, 2011 04:30 PM EST TSX higher as gold climbs Italy still fly in the ointment The Toronto stock market was slightly higher Monday as bullion prices made strides amid traders’ fears about Europe’s debt problems. The S&P/TSX composite index gained 53.73 points to close at 12,461.98 The Canadian dollar strengthened 0.49 cents to 98.74 cents U.S. Worries about the state of Italy’s finances drove the price of gold up (see below). On the TSX, shares in Barrick Gold Corp. added $1.31 to $53.54. Italy’s borrowing rates spiked Monday to their highest levels since the country adopted the euro and there was speculation that Italian Prime Minister Silvio Berlusconi may resign. Markets fear that Italy’s debts are too large to be handled by an international bailout. Copper prices lost two cents to $3.54 U.S. a pound. In Canadian corporate news, uranium miner Cameco shares dropped 6.5% or $1.42 at $20.35 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. 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 23 cents to $25.15 on the TSX. Ensign Energy said its net profit in its 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 20 cents to $15.55 each. The union representing Air Canada’s flight attendants says an arbitrator has issued a decision that establishes a new collective agreement with the Montreal-based carrier. The union said it was "profoundly disappointed" with the decision that imposes provisions of a tentative agreement rejected by employees last month. Shares in Air Canada were up or two cents to $1.38. Monday was 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 prospered 11.91 points to 1,661.92, while the Nasdaq Canada index slid 0.47 points to 428.46 Nine of the 14 Toronto subgroups gained ground on the day. Gold triumphed 2.4%, while materials spiked 1.6%, and consumer discretionaries perked 0.6%. The five laggards were weighed down mostly by health-care, off 1.3%, metals and mining, down 1%, and information technology, sliding 0.5%. ON WALLSTREET In New York, stocks moved higher in the final hour of trading after a choppy day. Investors have shifted their focus to Italy, as it appears Greece is finally getting its house in order. The Dow Jones Industrials accelerated 85.15 points to end the day at 12,068.39 The S&P 500 improved 7.89 points to 1,261.12, while the Nasdaq Composite Index moved higher by 9.10 points to 2,695.25. Embattled investment bank Jefferies managed to stay in positive territory, after disclosing that it had sold a large chunk of its positions in European sovereign debt. The stock dropped roughly 18% last week on fears that it could be the next MF Global. Shares of DISH Network surged after the company announced a one-time divided payment. The satellite provider released its quarterly earnings 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 its initial offering price in the stock's public debut that morning. Borrowing costs in Italy skyrocketed Monday, with the yield on the 10-year note hitting a record high of 6.68% at one point, before easing to settle at 6.66%. Over the weekend, tens of thousands took to the streets in Rome to protest Italian Prime Minister Silvio Berlusconi's reforms. He faces a vote of confidence Tuesday and many are betting he's headed out the door, despite his denials. 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 monthly jobs report showed Friday that the U.S. added 80,000 jobs in October. Economists surveyed by CNNMoney were expecting a gain of 98,000 jobs. The price on the benchmark 10-year U.S. Treasury inched higher, lowering the yield to 1.99% from 2.05% late Friday. Treasury prices and yields move in opposite directions. Oil for October delivery gained $1.65 to $95.91 U.S. a barrel Gold futures for December delivery added $28.60 to $1,784.70 U.S. an ounce
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