It's commodities dayRTGAMIt seems as though it was just last week - wait a minute, it was just last week - when observers were commenting about the necessary downturn in commodity prices and the long overdue rebound in financial stocks. On Wednesday, those comments looked like nothing more than a head-fake, with commodity stocks rallying and financials heading back into the basement.Gold rose to $949.20 (U.S.) an ounce in New York, up $14.20.
That's still 8 per cent below its recent record high, but gold certainly has momentum on its side now. Similarly, crude oil futures rose to $105.90 a barrel in New York, up $4.68. Again, that's 4 per cent below the record, but the gap is closing fast.
This is good news for the commodities-heavy SP/TSX composite index, which closed at 13,390.34, up 68.12 points or 0.5 per cent. Talisman Energy Inc. rose 5.7 per cent, EnCana Corp. rose 2.2 per cent and Barrick Gold Corp. rose 5.1 per cent.
On the down side, though, financials fell on renewed pessimism over whether the worst really is over for the U.S. economy and the enormous writedowns taken by banks around the world. Bank of Montreal fell 4.2 per cent and Royal Bank of Canada fell 2.5 per cent.The commodity-light Dow Jones industrial average closed at 12,422.86, down 109.74 points or 0.9 per cent.
Exxon Mobil Corp. rose 1.2 per cent, but Citigroup Inc. fell 5.6 per cent and JPMorgan Chase [amp]amp; Co. fell 4.2 per cent.The broader S[amp]amp;P 500 closed at 1341.13, down 11.86 points or 0.9 per cent. There, the big laggards included Citigroup, JPMorgan, Cisco Systems Inc. and Bank of America after Meredith Whitney, the influential analyst at Oppenheimer [amp]amp; Co., lowered her earnings forecasts for a number of U.S. investment banks.Still, not every financial stock was in the doldrums.
Bear Stearns Cos. Inc. rose as high as $12 in the afternoon - before closing at $11.21, up 2.5 per cent - or 20 per cent above the new-and-improved $10 a share takeover offer from JPMorgan, as investors bet that there is another, newer-and-more-improved offer in the works. Optimism pops up in the strangest of places.[amp]nbsp;Copyright 2001 The Globe and Mail
