CANADA STOCKS-TSX rises on financials, energy shares

Wed Jul 18, 2012 11:24am EDT
 
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* TSX up 28.17 pts, or 0.2 pct, at 11,599.36
    * Energy shares rise on higher U.S. oil
    * Financials gain on solid BofA earnings
    * Dampened Fed stimulus hopes limit gains

    By Jon Cook
    TORONTO, July 18 (Reuters) - Canadian stocks rose early on
Wednesday, led by energy and financial shares, boosted by higher
oil prices and strong second-quarter earnings from Bank of
America Corp, but worries about the U.S. and euro zone
economies limited gains.
    Canadian financials led the broader index higher, rising 0.3
percent. The influential sector continued to garner support from
better-than-expected earnings from U.S. banks.
    On Wednesday, Bank of America Corp, the second-largest U.S.
bank, posted second-quarter earnings of $2.5 billion, reversing
a year-earlier loss. 
    "At the end of the day the numbers have been better than
expectations and that has improved the sentiment toward the
financials," said Bob Gorman, chief portfolio strategist at TD
Waterhouse.
    JPMorgan Chase & Co, Wells Fargo & Co,
Citigroup Inc and Goldman Sachs Group Inc in recent
days all beat analysts' earnings estimates.
    In Canada, gains were led by Toronto-Dominion Bank,
up 0.5 percent to C$80.30, Bank of Nova Scotia, which
edged up 0.5 percent to C$52.30, and Royal Bank of Canada
, up 0.3 percent to C$52.49. 
    The oil and gas patch also climbed 0.2 percent as oil prices
climbed for the sixth straight session. U.S. crude was heading
for its highest close since May 29, after bloodshed in Syria
highlighting worries about supply from the Middle East. 
    The most influential gainers included: Canadian Natural
Resources, up 3 percent at C$28.13, Suncor Energy
, which rose 0.9 percent to C$30.27, and TransCanada Corp
, up 0.9 percent at C$44.16.
    At 10:48 a.m. (1448 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was up 28.17 points, or 0.2
percent, at 11,599.36.
    Gains were limited by losses from the heavily-weighted
materials sector, which sank 0.2 percent as gold fell on
dampened speculation that the cooling U.S. economy would
imminently require more stimulus. 
    Declines were led by top gold miners Goldcorp Inc,
which fell 3.1 percent to C$33.04, Barrick Gold, off 1
percent at C$34.74, and Yamana Gold, down 2 percent to
C$14.67.
    Global growth fears increased following comments from German
Chancellor Angela Merkel. The German leader was quoted in a
media report as saying, "We have not yet shaped the European
project so that we can be sure that everything will turn out
well, we still have work to do."
    Markets were already in a nervous mood after Fed Chairman
Ben Bernanke said on Tuesday that the U.S. economic recovery was
being held back by anxiety over Europe's debt crisis and the
path of U.S. fiscal policy, and his unease over the stagnant
jobs market. 
    However strong U.S. housing data on Wednesday restored some
confidence in the American recovery. The Commerce Department
said housing starts rose 6.9 percent last month to a seasonally
adjusted annual rate of 760,000 units, the highest rate since
October 2008. 
    "You're not seeing further deterioration," said Gorman. "The
worst fears are not being realized."