July 26, 2012 / 3:35 PM / 7 years ago

CANADA STOCKS-TSX rises on ECB pledge; Barrick, Potash cap gains

* TSX up 48.11 pts, or 0.4 pct, at 11,540.62
    * Energy shares lead gains
    * ECB comments boost commodities
    * Weak Barrick, Potash earnings weigh on materials

    By Jon Cook
    TORONTO, July 26 (Reuters) - Canadian stocks rose on
Thursday, led by energy shares, as euro zone fears eased after
the head of the European Central Bank vowed to protect the
debt-plagued region from collapse.
    ECB President Mario Draghi, speaking in London, said the ECB
was ready, within its mandate, "to do whatever it takes to
preserve the euro." His comments bolstered investors' risk
appetite, driving up global equities and the euro.
    The spurt of confidence in the outlook for the global
economy, which has been shadowed by threats of contagion from
the euro zone crisis, offset weak earnings from top miners
Barrick Gold and Potash Corp. 
    The euro hit a two-week high against the U.S. dollar after
Draghi's pledge, driving a rally in dollar-denominated commodity
    "The news out of Europe helped stabilize everything," said
John Hughes, senior mining analyst at Desjardins Securities. 
    Canada's powerhouse energy sector jumped 1 percent, as U.S.
oil prices rose on the improved confidence in Europe and on a
sharp drop in U.S. jobless claims, which fell to a near
four-year low.  
    Energy gains were led by top oil producer Suncor Energy
, which rose 1.6 percent to C$31.40 after reporting a 28
percent jump in second-quarter profit earlier this week. The
company on Wednesday also said it would scale back an ambitious
growth program that had troubled some shareholders.
    Cenovus Energy climbed 1.3 percent to C$31.57, and
Canadian Natural Resources rose 1.2 percent at C$27.81.
    Around 11 a.m. EDT (1500 GMT), the Toronto Stock Exchange's
S&P/TSX composite index was up 48.11 points, or 0.4
percent, at 11,540.62.
    The heavily weighted materials subindex, which includes
miners, fell 0.5 percent on dismal earnings results from
industry leaders Barrick and Potash.
    Shares of Barrick, the world's largest gold producer,
plunged more than 8 percent to C$31.50 after the company
reported a 35 percent decline in quarterly profit and warned
that capital costs on one of its biggest growth projects would
dwarf its previous forecast. 
    The cost revision for Barrick's massive Pascua-Lama gold
mine, straddling the border between Chile and Argentina, may
shed some light on last month's sudden dismissal of Aaron Regent
as chief executive.
    "The market is disappointed that the companies are not in
more control of their costs," said Hughes. "That's evident today
in the Pascua-Lama project for Barrick."
    Shares of Potash, the world's largest fertilizer maker, 
sank 2 percent to C$44.37 after the company reported a 38
percent drop in its second-quarter profit and forecast
weaker-than-expected earnings for the latter half of 2012.
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