April 14, 2008 / 9:25 PM / 9 years ago

UPDATE 4-Resource strength helps lift Toronto stocks

4 Min Read

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By Leah Schnurr

TORONTO, April 14 (Reuters) - The Toronto Stock Exchange's main index climbed higher on Monday, propped up by robust energy shares that offset worries about the prospects for earnings season and further fallout from the credit crunch.

The energy and materials sectors were the only groups to push higher, amid a jump in the price of oil to a record close of $111.76 a barrel.

Canadian Natural Resources (CNQ.TO) rose C$3.93, or 5 percent, to C$82.32 and Imperial Oil (IMO.TO) added C$2.18, or 4 percent, to C$56.22, while the overall sector was up 2.6 percent.

The S&P/TSX composite index .GSPTSE closed up 55.57 points, or 0.41 percent, at 13,738.60, off of a session high of 13,775.08.

But U.S. bank Wachovia WB.N set a negative tone early in the day after it reported a quarterly loss, hurt by surging credit problems from mortgages and other debt.

The unexpected miss, coming on the heels of a lower profit posted last week by bellwether General Electric (GE.N), added to worries of a weak earnings season.

"I think the market hates surprises ... and most people had expected the company to show earnings, not a loss," said Irwin Michael, portfolio manager at ABC Funds.

"When you get a surprise like that, people imagine that a lot of other companies are going to show the same thing in the industry," Michael said.

Financials on Bay Street were snagged in the negativity, with almost all of the major banks closing lower. Canadian Imperial Bank of Commerce (CM.TO) shed C$1.38, or 2.1 percent, to C$65.89 and Bank of Nova Scotia (BNS.TO) was down 66 Canadian cents, or 1.5 percent, at C$44.88. The group as a whole lost 1 percent.

Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier, said that while the outlook for earnings for Canadian banks is much better than their U.S. counterparts, "obviously there's a shroud of uncertainty over the whole financial sector globally."

"That mood is still there," said Nakamoto. "I think there's still a sense of, is there more to be disclosed by Canadian financials."

The resource-laden materials sector added 0.6 percent, helped by advances by fertilizer companies Agrium (AGU.TO) and Potash Corp of Saskatchewan (POT.TO). Agrium jumped C$4.90, or 6.7 percent, to C$78.09, and Potash Corp rose C$2.66, or 1.5 percent, to C$185.35.

Teck Cominco TCKb.TO was off 91 Canadian cents, or 2 percent, to C$45.70 after it said it will buy Global Copper Corp GLQ.TO to obtain its Relincho copper-molybdenum deposit in Chile. Meanwhile, shares of junior miner Global surged C$2.78, or 25 percent, to C$13.91. The two companies said the rest of Global will be spun off as a new company.

Shares of Vasogen VAS.TO lost 16 Canadian cents, or 21.9 percent, to 57 Canadian cents after the company said it will slash its staff by 85 percent, and halted funding of studies for its Celacade heart failure treatment to change focus to a new area of drugs.

Market volume was 294 million shares worth C$5.4 billion. Decliners outpaced advancers 870 to 687. The blue chip S&P/TSX 60 index .TSE60 closed up 4.21 points, or 0.52 percent, at 809.91.

U.S. financials were dragged lower by Wachovia's results. The Dow Jones industrial average .DJI ended down 23.36 points, or 0.19 percent, at 12,302.06, and the Nasdaq composite index .IXIC dipped 14.42 points, or 0.63 percent, to 2,275.82.

$1=$1.02 Canadian Editing by Rob Wilson

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