Gold, Potash take TSX higher; BlackBerry pounded
By John Tilak
TORONTO (Reuters) - Canada's main stock index rose on Monday as a jump in the shares of gold miners and in Potash Corp (POT.TO: Quote) provided support, offsetting weakness in BlackBerry Ltd (BB.TO: Quote) after the smartphone maker called off a sale of the company.
Investors were also encouraged by data showing global manufacturing increased last month at its fastest pace in more than two years. Signs of strength in the global economy benefit the export-focused Canadian market, which has gained close to 5 percent in the last month.
But BlackBerry shares plunged 16.6 percent after the smartphone maker said it was abandoning a plan to sell itself, and instead will replace its chief executive and raise about $1 billion from institutional investors, including its largest shareholder, Fairfax Financial Holdings Ltd (FFH.TO: Quote).
BlackBerry stock weighed the most on the index, dropping to C$6.75 by the close. Fairfax Financial shares slipped 2.5 percent to C$423.98.
"They've bought themselves time to try to stabilize the situation," said Michael Sprung, president of Sprung Investment Management. "This probably gives them a few years at least to work something out, or possibly sell the company, either in whole or in part."
Investors also tried to see which way the U.S. Federal Reserve would go with its monetary stimulus program.
Earlier in the day, St. Louis Federal Reserve President James Bullard said that because of low inflation the Fed should not rush a decision to scale back its asset purchase program.
"I don't think we'll see any tightening until they're fairly confident that the momentum in the recovery can carry on without the liquidity provided by the Federal purchases," Sprung said. Continued...