Gold, energy lift TSX
The Toronto stock market pushed up slightly Monday as energy and gold stocks stabilized after last week’s 200-point index decline and investors looked ahead to Wednesday’s U.S. Federal Reserve interest rate announcement.Toronto’s S&P/TSX composite index rose 31.12 points to 11,687.16 after last week’s mostly negative performance amid weakness in the energy sector and concerns about an economic slowdown in the U.S.
The energy sector, which makes up about 30 per cent of the index, was up 1.5 per cent even as the October contract for light sweet crude oil on the New York Mercantile Exchange fell 20 cents to US$63.13 a barrel, reflecting the market’s belief that OPEC may trim output to bolster prices against lower consumption forecasts.
EnCana Corp. (TSX: ECA) shares rose $1.12 to $51.80.
“After the recent pullback that we have gone through in the last week or two, you expect to have some sort of stabilization process,” said Joe Ismail, technical analyst at Maison Placements Canada. “The market has a positive tone (today).”
But while a slight rebound in energy and a reshuffling of portfolios as a number of futures and indexes expired appears to be behind Monday’s more positive tones, Ismail said “a second down leg is coming in” for the Toronto market.
“That will take the TSX to that 11,000 zone, and that should be the corrective phase.”
The Canadian dollar traded at 89.45 cents US, up 0.09 of a cent.
A Statistics Canada report shows Canadians invested $6.3 billion in foreign securities in July, and foreign purchases of Canadian securities picked up speed to $3.2 billion after a brief pause in June. Economists had been forecasting investments of $1.5 billion.
In New York, markets were little-changed as investors made few big moves while they awaited Wednesday’s U.S. Federal Reserve meeting. The market is nervous about whether the Fed will keep the benchmark interest rate at 5.25 per cent as readings of economic growth and inflation remain mixed.
The TSX gold sector was up 0.2 per cent as the contract for bullion on the Nymex rose $2.40 to US$585.40 an ounce. Shares in Barrick Gold Corp. (TSX: ABX) fell five cents to $32.69.
The metals and mines sector also contributed to the increase, moving up 0.6 per cent. Shares in Teck Cominco Ltd. (TSX: TCK.B) gained 55 cents to $67.14.
The consumers staples and technology sectors were the lead decliners, with Nortel Networks (TSX: NT) down 1.12 per cent.
The TSX Venture Exchange was up 7.57 points to 2,573.81.
The Dow Jones industrial average was up 0.64 points to 11,561.41 after gaining 170 points last week. The Nasdaq composite index was up 2.75 points to 2,238.34, while the S&P 500 index was up 1.66 points to 1,321.53.
The U.S. Commerce Department said the deficit in the broadest measure of foreign trade increased to US$218.4 billion in the spring — above the US$213 billion that economists had predicted and the second-highest level on record.
Investors also took in news that executives of General Motors Corp. (NYSE: GM) and Ford Motor Co. (NYSE: F) have discussed a possible merger or alliance but are not talking now, according to a report in the trade journal Automotive News. That report comes as GM and Ford have been slashing their workforces and closing plants in efforts to reverse multi-billion dollar losses.
Shares in Freescale Semiconductor Inc. (NYSE: FSL), a maker of cellphone chips that was spun off by Motorola Inc., rose 5.68 per cent after the company said Friday it agreed to be purchased by a private-equity consortium for US$17.6 billion.
In other news:
— Stock in Gienow Windows and Doors Income Fund (TSX: GIF.UN) dropped 45.2 per cent Monday after it cut monthly distribution to five cents, from eight cents per unit, on weakening demand in Eastern Canada and labour supply problems in Western Canada.
— Shares in RioCan Real Estate Investment Trust (TSX: REI.UN) fell four cents to $23.68 after the company said it will increase its monthly distribution starting in October to 11 cents per unit from a prior 10.75.
— Cosmetics company Revlon Inc.’s stock (NYSE: REV) lost three per cent after Jack Stahl said he has resigned as president and chief executive to pursue other interests. Stahl will be succeeded by David Kennedy, Revlon’s current chief financial officer.
— Shares in Northgate Minerals Corp. (TSX: NGX) were down two cents to $3.53 after the company restated its second-quarter financial results Friday to lower its revenue and profits for the quarter due to an “inadvertent accounting error.”
— AnorMed Inc. (TSX: AOM) said Monday it will get a US$3-million milestone payment from Shire Pharmaceuticals Group PLC after Shire wins German approval of fosrenol to treat high blood phosphate levels related to kidney dialysis. Its stock was down nine cents to $10.85.
In overseas trading, London’s FTSE 100 index rose 18 points to 5,895.
Frankfurt’s DAX 30 is down 11.47 to 5,926.40, while the Paris CAC 40 fell 1.87 points to 5,143.01.
Hong Kong shares were boosted by buying in property companies amid hopes that the U.S. Federal Reserve may refrain from raising interest rates. Most other Asian markets also advanced and Tokyo businesses were closed for a holiday.
Hong Kong shares edged up as traders bought real estate stocks after the U.S. released moderate inflation data Friday that suggested the Fed may leave interest rates untouched when it meets Wednesday.
The blue-chip Hang Seng Index rose 149.56 points, or 0.87 per cent, to 17,387.21.