Tsx runs higher

Financial, tech stocks push TSX higher; oil prices well off early highs

By Malcolm Morrison, The Canadian Press – 4 hours ago

TORONTO — The Toronto stock market closed higher Wednesday, led by gains in technology and financial stocks while oil prices advanced after two days of big losses.

The S&P/TSX composite index was well off early highs, coming off a 146-point surge to close up 32.24 points to 13,833.64 while the TSX Venture Exchange dipped 2.09 points to 2,301.68.

The Canadian dollar ended the session up 0.08 of a cent at 103.91 cents US.

The TSX financial sector rose 0.55 per cent with TD Bank (TSX:TD) ahead 58 cents to $83.25 while Royal Bank (TSX:RY) climbed 62 cents to $60.42.

In the U.S., JPMorgan Chase's first-quarter profit jumped 67 per cent on solid growth in investment banking fees and a drop in losses in its credit card portfolio. But its mortgage business remained weak and chief executive Jamie Dimon said JPMorgan and other banks will likely pay more fees and penalties after investigations into foreclosure proceedings in all 50 states are finished and its shares lost early momentum and fell 39 cents to US$46.25.

The TSX tech sector was up 1.58 per cent after U.S. networking-storage maker Riverbed Technology (NASDAQ:RVBD) gave a better-than-expected first-quarter forecast. Its shares surged 12.25 per cent to US$34.71 in New York. On the Toronto market, Research In Motion Ltd. (TSX:RIM) advanced $1.16 to $52.79 while Open Text Corp. (TSX:OTC) advanced $1.22 to $60.

The energy sector rose a modest 0.14 per cent even as oil prices advanced following a drop of more than US$6 over the previous two sessions, with the May crude contract on the New York Mercantile Exchange up 86 cents at US$107.11 a barrel.

Prices took off after the U.S. Energy Department said oil inventories increased by an expected 1.6 million barrels last week, but that distillates and gasoline inventories fell more than expected.

Cenovus Energy (TSX:CVE) was ahead 23 cents at C$36.34 while Canadian Natural Resources (TSX:CNQ) lost 80 cents to $43.54 .

Crude had jumped as much as 30 per cent from mid-February as markets quickly applied a high-risk premium to oil amid a civil war in Libya and a wave of unrest that swept across several Mideast countries. But after rising to almost US$113 a barrel last Friday, there were worries about the degree to which high oil prices might impact demand and the overall global economic recovery. Also, Goldman Sachs warned investors Monday that crude oil prices were due for a "substantial pullback."

Falling prices for oil and metals helped send the TSX plunging more than 400 points during Monday's and Tuesday's sessions. The selloff was also sparked by a report from Goldman Sachs strategist Noah Weisberger that he was no longer recommending Canadian stocks.

The assessment came after the TSX hit its high for the year last Tuesday around the 14,270-mark.

"We think that after a big run-up, any excuse to take some profits is fine," said Paul Vaillancourt, vice-president, Canadian Wealth Management in Calgary, adding that technical analysis indicates the Toronto market will be trading between 13,560 and 14,357.

"I don't think the bull market in commodities is over, certainly not (in) the longer term."

The base metals group was the major decliner, off 1.14 per cent as copper prices gave up early gains and fell for a third day. The May copper contract in New York dropped nine cents to US$4.29 a pound. First Quantum (TSX:FM) lost $3.60 to C$121.30 and Teck Resources (TSX:TCK.B) fell 97 cents to $50.90.

Rio Tinto shares fell 47 cents to US$71.66 in New York after the mining giant said it expects iron ore production will increase in 2011 from a temporary dip in the first quarter caused by Australian cyclones and iron ore equipment breakdown in Canada. The world's second-largest mining company said global iron ore output dropped three per cent from a year earlier, largely as a result of extreme weather that caused monsoon flooding Down Under.

The gold sector was also lower as bullion prices also advanced with the June contract on the Nymex up $2 at US$1,455.60 an ounce. Kinross Gold (TSX:K) lost 22 cents to $30.88.

The telecom sector was off 0.25 per cent as telecom Shaw Communications Inc. (TSX:SJR.B) reported that its profits rose 20.6 per cent to $167.3 million or 37 cents per share in the second quarter, meeting analyst expectations. Revenue increased 28.8 per cent to $1.2 billion. But Shaw also said it was tapping the brakes on its planned wireless rollout and its shares declined 69 cents to $19.80.

New York markets were mainly little changed as investors also took in a speech by President Barack Obama where he proposed lowering the future deficits in the U.S. by US$4 trillion over a dozen years. He proposed reductions in the growth of Medicare spending, cuts in defence, an overhaul of the tax system to eliminate many loopholes enjoyed by individuals and corporations, and an end to Bush era tax cuts for wealthier Americans.

The Dow Jones industrial average rose 7.41 points to 12,270.99.

The Nasdaq composite index gained 16.73 points to 2,761.52 while the S&P 500 index added 0.25 of a point to 1,314.41.

On the economic front, the U.S. Commerce Department said retail sales increased 0.4 per cent last month, the ninth consecutive gain. However, the increase shrank to a slight 0.1 per cent when sales at gasoline stations were excluded. But much of the weakness came from a big drop in auto sales. Excluding gasoline and autos, sales were up a more respectable 0.6 per cent.

Investors also took in an economic assessment from the Federal Reserve which said the U.S. economy showed improvement this spring throughout the country, as factories were busier, consumers spent more and companies boosted hiring in all 12 regions surveyed by the Fed. But the Fed also notes in a new report that high energy prices are putting pressure on businesses to raise their prices. Also, workers are not seeing wage increases because they lack leverage in the tight jobs market.