July 26, 2010 / 9:12 PM / 9 years ago

CANADA STOCKS-TSX rises on optimism about economic recovery

* TSX up 31.86 points, or 0.27 percent, at 11,746.07

* Seven of 10 sectors higher

* Weak gold miners limit gains (Adds details, quotes)

By Jennifer Kwan

TORONTO, July 26 (Reuters) - Toronto’s main stock index ended higher on Monday as strong U.S. corporate earnings and home-sales data boosted investor optimism about the economic recovery.

The market mood was buoyed especially by FedEx Corp’s (FDX.N) move to raise its quarterly and full-year earnings forecasts. [ID:nN26199061]

Economically sensitive financial issues gained 0.9 percent, with Royal Bank of Canada (RY.TO) up 0.8 percent at C$52.45, Bank of Montreal (BMO.TO) rising 1.7 percent to C$62.85, and Toronto-Dominion Bank (TD.TO) up 1.4 percent at C$72.92.

Strength in the big oil and gas sector, up 0.7 percent, also helped push the index higher. Suncor Energy (SU.TO) rose 0.9 percent to C$33.68, and Canadian Natural Resources (CNQ.TO) was up 0.2 percent at C$36.70.

“We got really upbeat guidance from FedEx,” said Barry Schwartz, vice-president and portfolio manager at Baskin Financial Services, who noted that the rosy outlook followed strong earnings from United Parcel Service Inc (UPS.N) earlier this month.

Both FedEx and UPS are considered proxies for global economic health because their package-delivery and services businesses expand during boom times and shrink in recessions.

“If they’re seeing a pick up in demand, increase in volumes, then that’s a very good sign. All of a sudden the market is focused less on the economic growth, which is slowing and more on the fact that, yes, it’s slowing but it’s going at a pretty good rate,” Schwartz said.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE finished the session up 31.86 points, or 0.27 percent, at 11,746.07, with seven of its 10 sectors higher.

Also keeping the market happy was U.S. data showing sales of new single-family homes rebounded strongly in June from the previous month’s record low. [ID:nN26203473]

Limiting the TSX’s gains were gold miners, which fell as bullion prices lost their safe haven appeal on rising equities. [GOL/] Barrick Gold (ABX.TO), the world’s No. 1 producer, fell 1.7 percent to C$43.12.

“There’s no reason to own gold when markets are rocking and rolling,” said Schwartz.

Despite the generally positive mood, the recovery is still very fragile, said Michael Sprung, president of Sprung & Co. Investment Counsel.

“I guess this is a market that is still desperately trying to find some good news to cling on to and anything that is not a big disappointment is taken that the economy is still managing to sputter along and even maybe grow a little bit,” Sprung said.

“I still think there’s still a lot of worry in the market. This is still a very fragile recovery.”

Also ending on the downside was the information technology sector, which fell 0.9 percent as Research In Motion RIM.TO shed 0.9 percent to finish the day at C$57.18. The small healthcare sector was lower as well, off 0.2 percent.

The blue chip S&P/TSX 60 index .TSE60 closed 2.16 points higher, or 0.32 percent, at 685.83.

$1=$1.03 Canadian Reporting by Jennifer Kwan; editing by Rob Wilson

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below