TSX nets small gain on higher oil prices
By Jon Cook
TORONTO (Reuters) - Canada's main stock index kept its head above water on Monday, buoyed by higher oil prices, but gains were offset by financial sector losses spurred by weak U.S. retail sales data and concerns about crucial euro zone bailout funds.
U.S. oil prices were lifted by hopes that signs of economic slowing will prompt stimulus measures, especially in China. Another factor was escalating tensions in the Middle East, after a U.S. Navy vessel near the United Arab Emirates fired on a small boat that failed to heed warnings. <O/R>
Canada's heavyweight energy sector rose 0.8 percent to lift the broader index into positive territory. Leading the way was Suncor Energy (SU.TO: Quote), the country's largest oil and gas company, which climbed 1 percent to C$29.72.
Shares of MEG Energy Corp MEG.TO jumped more than 7 percent to C$38.05 after the company said on Monday it would boost capital spending by C$380 million ($374.1 million) this year as it looks to raise output from its existing oil sands operations by a third.
Oil and gas shares got a boost from remarks by Chinese Premier Wen Jiabao, who said Beijing would step up efforts to boost the economy in the aftermath of Friday's second-quarter GDP figures that showed the world's second-largest economy is slowing.
Gains were held in check, however, as more worrying data came in from Canada's largest trading partner. U.S. retail sales fell 0.5 percent in June, the third straight month of decline, as demand slumped for everything from cars to electronics and building materials, a sign the U.S. economic recovery is flagging.
"Consumers in the U.S. continue to pay down their debt and de-leverage and when they're doing that, having weaker sales is not unexpected," said Arthur Salzer, chief executive officer of Northland Wealth Management.
Markets looked ahead to Federal Reserve Chairman Ben Bernanke's semiannual testimony before congressional panels on Tuesday and Wednesday. Investors will parse his words for clues about the possibility and timing of another round of stimulus from the U.S. central bank. Continued...