CANADA STOCKS-TSX flat as energy gains offset Europe worries

Wed Jul 18, 2012 5:45pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* TSX ends up 7.96 pts, or 0.1 pct, at 11,579.15
    * Energy shares rise on higher U.S. oil
    * Financials gain on BofA earnings
    * Merkel comments ignite euro zone concerns

    By Jon Cook
    TORONTO, July 18 (Reuters) - Canada's main stock index eked
out its fourth straight gain on Wednesday, led by energy shares,
but comments by German Chancellor Angela Merkel reignited
worries about the euro zone debt crisis.
    Half of Canada's 10 main sectors finished higher, reflecting
investor uncertainty about the outlook for global growth.
    "Canada is flat," said Pat McHugh, Canadian equity
strategist at Manulife Asset Management. "We're not going to get
anything moving here until we see a whiff of global growth."
    The heavyweight oil and gas sector kept the broader index in
positive territory, rising 0.3 percent. Energy shares climbed
with oil prices amid rising tensions in the Middle East and as
U.S. gasoline stocks unexpectedly fell last week. 
    The biggest gainers included Canadian Natural Resources
, up 2.8 percent at C$28.07, Suncor Energy,
which rose 0.7 percent to C$30.20, and TransCanada Corp
, up 1 percent at C$44.21.    
    The influential Canadian financial sector edged up 0.2
percent, as U.S. bank earnings continued to beat expectations.
    The latest was Bank of America Corp, the
second-largest U.S. bank, which posted quarterly earnings of
$2.5 billion, reversing a year-earlier loss. 
    That followed recent positive results from JPMorgan Chase &
Co, Wells Fargo & Co, Citigroup Inc and
Goldman Sachs Group Inc.
    "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
    In Canada, financial gains were led by Toronto-Dominion Bank
, up 0.6 percent to C$80.37, Bank of Nova Scotia
, which rose 0.5 percent to C$52.29, and Bank of
Montreal, edging up 0.3 percent to C$57.78.
    North American earnings outlook was also helped by
second-quarter profits from U.S. bellwethers Intel and
Honeywell, defying the downward trend of U.S. economic
    The Toronto Stock Exchange's S&P/TSX composite index
 finished up 7.96 points, or 0.1 percent, at 11,579.15.
At one point the index touched 11,615.38, its highest level
since July 10.
    Gains were pared by losses from the heavily weighted
materials sector, which slid 0.5 percent. Gold fell as
speculation faded that the cooling U.S. economy would imminently
require more stimulus. 
    Declines were led by top gold miners Goldcorp Inc,
which fell 3.6 percent to C$32.86, Barrick Gold, off
1.2 percent at C$34.66, and Yamana Gold, down 3.1
percent to C$14.50.
    Also weighing was Cogeco Cable Inc, whose shares
plunged nearly 15 percent to C$37.90 after the company said on
Wednesday it will pay $1.36 billion to buy U.S. cable operator
Atlantic Broadband. 
    In other news, Agrium Inc shares jumped 3 percent
to C$96.69 after the fertilizer maker and farm products retailer
raised its second-quarter earnings forecast on Wednesday.
    Worries about Europe's ability to solve its debt woes
escalated after Merkel 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
    On Tuesday, U.S. Federal Reserve Chairman Ben Bernanke said
that the U.S. economic recovery was being held back by anxiety
over Europe's debt crisis. On Wednesday, Bernanke softened his
tone, saying the world's top economy would experience "continued
moderate growth." 
    Bernanke's remarks seemed to be supported by data that
showed U.S. housing starts rose 6.9 percent last month to the
highest since October 2008. 
    "There's something for the pessimists and there's something
for the optimists," said McHugh. "On the whole things are better
than expected."