October 14, 2009 / 9:40 PM / 9 years ago

REFILE-CANADA STOCKS-Strong oil boosts TSX despite gold's fall

 (Refiles to fix typo in headline)
 * TSX rallies to highest level in nearly 3 weeks
 * Energy shares up as oil prices hit 2009 high
 * Bank shares rally on JPMorgan profit
 * Gold shares top decliners as bullion price retreats  (Adds details and comments)
 By Ka Yan Ng
 TORONTO, Oct 14 (Reuters) - Toronto’s main stock index closed higher on Wednesday as rising oil prices lifted Suncor Energy (SU.TO) and other oil and gas shares, while upbeat U.S. corporate earnings helped boost sentiment.
 Suncor, the biggest contributor to the gain, jumped 4.29 percent to C$40.36, while shares of fellow oil company Canadian Natural Resources (CNQ.TO) advanced 3.4 percent to C$77.49.
 The rally in energy stocks came as the price of oil surged to a 2009 high above $75 a barrel due to optimism about a global economic rebound that would lead to higher energy demand. [O/R]
 The S&P/TSX composite index .GSPTSE hit its highest level in nearly three weeks, closing up 119.24 points, or 1.04 percent, at 11,532.78.
 In New York, the Dow industrials average pierced the 10,000 level for the first time in a year, encouraged by better-than-expected U.S. retail sales for September and surprisingly robust financial results from banking and technology bellwethers JPMorgan Chase (JPM.N) and Intel Corp (INTC.O).[ID:nN14253782] [ID:nN14236340]
 That helped light a fire under bank stocks in Toronto. Royal Bank of Canada (RY.TO) added 1.5 percent to C$55.94, and Toronto-Dominion Bank (TD.TO) rose 1.7 percent to C$65.72.
 “(JPMorgan’s) capital markets division performed extremely well, so that’s a good read-through for the Canadian banks that are more levered to capital markets,” said Eric Brass, a portfolio manager with MFC Global Investment Management in Toronto.
 Canada’s earnings calendar starts to ramp up in the next several weeks, and the market will look to see if corporate results show improvement to the bottom line beyond cost-cutting now that the global economy is emerging from recession.
 “The market wants to see companies showing stronger organic sales growth. They want to see the economic recovery impacting revenue growth within companies, so cost-cutting won’t necessarily be sufficient,” Brass said.
 Gold-mining shares were among the heavy losers on Wednesday as they took a breather after the price of bullion ended well off the record high it set early in the session. [GOL/]
 “It probably won’t stay there long. As long as the U.S. dollar continues its weakness, the golds should continue to be firm,” said Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management Ltd in Calgary. “Nothing looks to be on the horizon immediately that’s going to change that outlook.”
 Five gold companies were among the top notable decliners, led by Goldcorp (G.TO), off 1.4 percent at C$43.76, and Barrick Gold (ABX.TO), down 0.92 percent at C$40.98.
 Some active issues on Wednesday included Canadian silver miner Pan American Silver Corp PAA.TO, which said it plans to acquire exploration company Aquiline Resources Inc AQI.TO in a deal valued at C$626 million. [ID:nN14236713]
 Pan American shares fell almost 6 percent to C$25.12, while those of Aquiline shares closed up 19.2 percent at C$6.52.
 ($1=$1.03 Canadian)  (Editing by Peter Galloway)                                      

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