Gold stocks support TSX, energy a drag, oil levels surge; N.Y lower on jobs data

Gold stocks support TSX, energy a drag, oil levels surge; N.Y lower on jobs data
14:39 December 2, 2009, EDT.
(Canadian Press)


TORONTO - Technology and gold stocks helped keep the Toronto stock market on positive ground at mid-afternoon Wednesday amid disappointments surrounding jobs data and a slow start to the U.S. holiday shopping season.

The S&P/TSX composite index was up 44.5 points to 11,751.8 on top of Tuesday's 260-point surge which sent the market to its highest close this year.

The Canadian dollar was off 0.18 of a cent at 95.36 cents US.

Energy stocks were the major weight after data showed that U.S. crude stockpiles rose 2.1 million barrels last week, against a decline of 1.3 million barrels that had been forecast.

The energy sector was down almost one per cent and the January crude contract fell $1.67 to US$76.70 a barrel. EnCana Corp. (TSX:ECA) fell 1.36$ to $56.27.

The gold sector was the leading advancer, up 2.3 per cent. Bullion moved further into record territory partly because of inflation fears but "I think the whole gold thing really is in large measure totally related to the U.S. dollar," said Fred Ketchen, manager of equity trading at Scotia Capital.

The December contract on the Nymex gained $12.90 to US$1,212 an ounce. Barrick Gold Corp. (TSX:ABX) climbed $1.83 to $50.03 and Goldcorp Inc. (TSX:G) advanced $1.41 to $48.31.

Investors also took in dull news from the employment and retail fronts.

Ahead of Friday's release of November jobless figures, the U.S. ADP National Employment Report said that 169,000 private sector jobs were lost in November. While showing another month of declining job losses, investors had been looking for a drop of 148,000.

"It all falls apart if you don't get jobs to come around," said Bill Stone, chief investment strategist at PNC Wealth Management in New York.

The ADP jobs report is often used as a gauge for Friday's monthly unemployment report from the U.S. Labour Department. Economists estimate that Friday's government non-farm payrolls report will show that 114,000 jobs were lost in the U.S. during November.

Meanwhile, new U.S. holiday shopping figures offered more evidence that confirms a modest start to the holiday shopping season. ShopperTrak says retail sales for the three-day holiday weekend rose 1.6 per cent. At the same time, customer traffic slipped 1.1 per cent compared with last year.

Elsewhere on the TSX, the December copper contract was ahead two cents at US$3.23 a pound after jumping 10 cents in the past two days and the base metals sector rose 0.66 per cent. Teck Resources (TSX:TCK.B) was ahead 86 cents to $37.87 while Equinox Minerals (TSX:EQN) gained 19 cents to $4.39.

The tech sector rose almost one per cent as Research In Motion Ltd. (TSX:RIM) climbed 86 cents to $63.47.

Financials were down slightly a day before earnings from National Bank (TSX:NA), TD Bank (TSX:TD), CIBC (TSX:CM). Royal Bank (TSX:RY) issues earnings on Friday and Scotiabank (TSX:BNS) next week.

It's expected that the markets will be generally pleased with results after Bank of Montreal (TSX:BMO) delivered a solid report last week that beat expectations and featured lower loan-loss provisions.

"BMO set a good tone because it was stronger, considerably stronger I think than what most analysts were forecasting," added Ketchen.

"We have dealt with the risk in the industry pretty well."

The TSX Venture Exchange moved 9.19 points ahead to 1,459.68.

New York markets turned mainly lower with the Dow Jones industrial average down 24.7 points to 10,446.9.

The Nasdaq composite index moved 8.1 points higher to 2,183.91 and the S&P 500 was off 0.6 of a point to 1,108.25.

In corporate news, Agrium Inc. (TSX:AGU) is taking steps to remove directors at CF Industries Holdings' (NYSE:CF) who have been blocking the Canadian fertilizer company's hostile takeover bid for the Illinois-based company. Agrium says it will nominate a slate of directors for election at CF's 2010 annual meeting and has challenged CF's current board to allow shareholders to decide whether they want to accept the takeover offer worth about $4.95 billion. Agrium shares rose $2.35 to $62.05.

Potash Corp. of Saskatchewan Inc. (TSX:POT) will be restarting operations at its Sussex-area mine Sunday following a temporary shutdown, but there is no certainty how long the work will last. Demand for potash is still weak globally and little product has moved out of the province, mine general manager Mark Fracchia said in an interview Tuesday. Potash shares ran ahead $5.34 to $127.

Canadian National Railway Co. (TSX:CNR) is offering to send just the issue of wages and benefits to binding arbitration in an effort to settle a strike by the railway's locomotive engineers. Ottawa has introduced back-to-work legislation to end a second CN strike in as many years. CN shares dipped 81 cents to $55.50.

Enbridge Inc. (TSX:ENB) shares were off 38 cents to $46.14 even as it announced it will increase its quarterly dividend by 15 per cent to 42.5 cents per common share, payable on March 1, 2010. The Calgary-based pipeline operator and natural gas distributor also says its adjusted operating earnings are expected to be 12 per cent higher in 2010 than in 2009.