CANADA STOCKS-TSX rallies on U.S. data, Greek hopes

Wed May 16, 2012 11:38am EDT
 
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* TSX up 32.34 pts, or 0.3 pct, at 11,373.39
    * Materials, energy shares cue rally
    * U.S. data lifts market sentiment
    * Germany, France comments bolster Greek hopes

    By Jon Cook	
    TORONTO, May 16 (Reuters) - Canadian stocks rose on
Wednesday, snapping three straight losing sessions, as resource
shares rebounded on strong U.S. data and on expectations that
Germany and France will act together to keep Greece in the euro
zone.	
    U.S. industrial production posted its fastest growth in more
than a year in April and groundbreaking for new U.S. homes
rebounded last month, suggesting the economy remains on a
steady, if unspectacular recovery course. 	
    Markets were further soothed after comments by Germany's
Chancellor Angela Merkel and the new French President Francois
Hollande that they both wanted Greece to remain in the euro
zone. 	
    Six of Canada's 10 main sectors were higher, boosted by a
1.4 percent jump in the heavily weighted materials group.	
    "What is driving the TSX this morning is a significant up
move in gold and base metals stocks," said Robert McWhirter,
president and portfolio manager at Selective Asset Management
Inc.	
    The most influential gainers included top gold producers
Barrick Gold, up 1.6 percent to C$35.82, Goldcorp Inc
, up 1.7 percent at C$33.33, and Yamana Gold,
which rose 3.2 percent to C$13.26.	
    "The price of gold stocks relative to gold and metals is
attractive," said McWhirter, but added investors remain wary
about the gold sector. "Margins are being squeezed by the
combination of the price of gold coming down and the cost of
production coming up."	
    Other miners on the upside included First Quantum Minerals
, which spiked 6.7 percent to C$17.97, and Inmet Mining
, jumping 3 percent to C$46.93.	
    Energy stocks rose 0.3 percent, led by Suncor Energy
, up 0.5 percent to C$27.80, and Canadian Natural
Resources, which gained 0.6 percent to C$29.63.	
    Also boosting sentiment was Canadian data that showed
factory sales blew past expectations in March with the biggest
gain in six months due to vigor in the oil industry, putting the
economy back on a growth track after a surprise contraction in
February. 	
    Around 11:23 a.m. (1523 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was up 32.34 points, or 0.3
percent, at 11,373.39. It touched a high at 11,474.05.	
    Despite the rally, the TSX was still down more than 7
percent so far this month.	
    Financial stocks shrugged off the positive comments by
Merkel and Hollande on Greece, edging down 0.2 percent. Bank of
Nova Scotia was the biggest laggard, down 0.6 percent
to C$52.33. Top insurer Manulife Financial fell 0.6
percent to C$11.57.	
    McWhirter said the rally was likely to be short-lived as
Europe's problems were not "being resolved with any great
vigor."