July 11, 2012 / 12:55 PM / in 5 years

TSX rallies on energy gains; Goldcorp weighs

TORONTO (Reuters) - Canadian stocks rose for the first time in a week on Wednesday, boosted by energy shares on hopes of further stimulus from the U.S. Federal Reserve. But gains were limited after the country’s second-largest gold miner, Goldcorp Inc G.TO, cut its outlook.

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch

U.S. oil futures climbed when minutes from a Federal Open Market Committee meeting in June showed policymakers are open to buying more bonds to stimulate the U.S. economy, but conditions might need to worsen first.

The Fed last month expanded its latest effort to keep long-term interest rates low, announcing it would buy an additional $267 billion in long-term bonds with proceeds from short-term notes in a measure known as Operation Twist. But the market was anticipating more easing measures after Friday’s disappointing jobs report.

“We didn’t get anything new from the FOMC today,” said Mike Newton, associate director and portfolio manager at Macquarie Private Wealth Inc. “It’s a very benign day.”

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 32.42 points, or 0.28 percent, at 11,544.64. However, thin summer volume exaggerated moves and kept markets volatile.

“It’s probably the normal reaction to four down days in a row,” said John Kinsey, portfolio manager at Caldwell Securities Ltd.

Seven of Canada’s 10 main sectors rose, led by the heavyweight energy group, which advanced 1.7 percent.

The biggest movers on the energy side included: Suncor Energy SU.TO, which climbed 1.8 percent to C$29.25, Cenovus Energy CVE.TO, up 3.2 percent at C$33.28, and Canadian Natural Resources CNQ.TO, up 2.4 percent to C$26.46.

Shares of Niko Resources Ltd NKO.TO surged 14 percent to C$14.05 after the oil and gas producer said its Ratnadewi-1 well in Indonesia is ahead of schedule.

However, gains were pressured by Goldcorp G.TO, whose shares plunged more than 10 percent to C$33.80 after the influential gold miner lowered its 2012 gold production outlook on Tuesday due to operational problems at its Red Lake mine in Ontario and its Penasquito mine in Mexico.

The Goldcorp news had an adverse impact on the heavily weighted materials sub-index, which fell 1.9 percent. Barrick Gold ABX.TO, the world’s top gold miner, slumped 1.9 percent to C$35.66.

“The last thing we needed was such a major sector to get knocked with such bad news out of Goldcorp,” said Newton. “There’s a lot of people cheering for (gold) names, but the reality and the evidence is contrary. It’s just been a disastrous trade.”

Gold and base metals mining shares have been hurt by weak global demand. Bullion rose on Wednesday but remained near its one-year low and copper prices retreated after the Fed minutes signaled no further action was imminent. <GOL/> <MET/L>

China’s June trade data on Tuesday stoked anxiety about the strength of domestic demand in the world’s second-biggest economy, with attention now turning to GDP numbers that are expected to show the economy recorded its worst performance since the 2008/09 financial crisis.

Canada’s trade deficit widened in May, fueled by record imports while exporters struggled to make any progress in the face of the European economic crisis.

Financial shares shrugged off the news, rising 0.7 percent. Bank of Nova Scotia BNS.TO advanced 1.1 percent to C$53.06, Royal Bank of Canada RY.TO edged up 0.6 percent at C$52.80 and Bank of Montreal BMO.TO climbed 0.8 percent to C$57.61.

Concerns about debt-ravaged Europe were heightened by lack of clarity about when Germany’s Constitutional Court would give its verdict on the new regional bailout fund, known as the European Stability Mechanism.

In other company news, Alimentation Couche-Tard Inc ATDb.TO shares gained 4.8 percent to C$48.10 after the Canadian convenience store operator reported a sharp increase in earnings on Tuesday, helped by strong sales, minor acquisitions and a robust motor fuel business.

($1=1.02 Canadian)

Editing by Dan Grebler

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