Commodities fuel rebound on TSX; Wall St. mixed
The Toronto stock market closed higher yesterday, clawing back a tiny part of the previous day’s 4.4 per cent plunge, in large part because of energy stocks rising alongside oil prices.
The main S&P/TSX composite index closed up 62.54 points to 9,896.72 after a 454-point selloff sparked by a World Bank report that warned the world economy will shrink 2.9 per cent in 2009 not its previously forecast 1.7 per cent.
Grim as the World Bank report was, analysts say investors were looking for an excuse to take some profits from the spring rally that started in mid-March and boosted the TSX as much as 41 per cent.
"We needed to see a bit of a pullback," said Don Reed, president of Franklin Templeton Investments Corp. and manager of the Templeton International Stock Fund.
"We’re in an environment where we see big moves both ways."
Since hitting a high on June 11, the TSX has lost about 7.5 per cent.
Yesterday, the TSX energy sector clawed back a chunk of Monday’s slide of more than 6 per cent, rising 1.5 per cent as the August crude contract in New York rose $1.74 (U.S.) to $69.24 after falling $2.62 on Monday. Suncor Inc. gained 97 cents (Canadian) to $33.16.
The financial sector was the biggest weight on the TSX, down 1.55 per cent, with Royal Bank of Canada off $1.04 to $44.06.
The Canadian dollar was a fifth of a cent higher to 86.96 cents (U.S.). The TSX Venture Exchange was down 4.48 points to 1,074 affordable new jersey health insurance.18.
U.S. markets were weak with the Dow Jones industrial average down 16.1 points to 8,322.91 after slumping 2.4 per cent Monday, weighed down by Boeing after it again delayed the first test flight of its long-awaited 787 jetliner.
In the tech sector, MySpace announced 300 overseas job cuts. The News Corp. unit’s shares rose two cents to $9.07 on Nasdaq yesterday. Oracle’s fiscal fourth quarter and full-year results beat Wall Street estimates. Its stock was up 51 cents, or 2.6 per cent, to $20.38 in after-hours trading after closing down 10 cents at $19.87 in regular trading.
The Nasdaq edged 1.27 points lower to 1,764.92 as the S&P 500 index rose 2.06 points to 895.10.
The U.S. Federal Reserve started its two-day meeting on monetary policy yesterday. The Fed is widely expected to keep its key rate near zero, but investors are unsure whether the central bank is optimistic about the economy or considering raising rates later this year to curb inflation.
On the TSX, the base metals sector was up 1 per cent after sliding 9 per cent Monday. Copper prices rose seven cents to $2.20 a pound. Teck Resources rose $1.08 (Canadian) to $17.84.
The August bullion contract in New York rose $3.30 (U.S.) to $924.30 and the TSX gold index was the biggest percentage gainer, up 4 per cent.
The Canadian Press