Canadian stocks rallied to close higher Thursday, led by financial and information technology issues with some encouraging earnings reports from Canadian banks and on acquisition deals. Nevertheless, investor sentiments remained subdued on continued worries over the eurozone debt crisis and some disappointing economic data from the U.S.
Toronto's main index, the S&P/TSX, closed Thursday at 11,513.21, up 79.99 points or 0.70 percent. The S&P/TSX Composite Index touched an intraday high of 11,518.44 and a low of 11,361.37.
The TSX Venture Index closed at 1,289.73, up 0.30 points or 0.02 percent. The index opened at 1,287.84 compared to its previous close of 1,289.43.
Major gainers on the S&P/TSX Index were Financials Index and the Information Technology Index. Among decliners were the the the Diversified Metals & Mining Index, the Materials Index, and the Global Gold Index.
The Metals & Mining Index dropped 0.37 percent, with Teck Resources Limited (TCK.B.TO) slipping 1.12 percent and First Quantum Minerals Ltd. (FM.TO) moving up 2.38 percent. Lundin Mining Corp. (LUN.TO) was up 0.50 percent.
The Global Gold Index edged down 0.05 percent, with gold futures for August delivery shedding $1.50 or 0.1 percent to close at $1,564.20 an ounce Tuesday on the NYMEX.
Among gold stocks, Goldcorp. (G.TO) shed 0.50 percent, Barrick Gold (ABX.TO) was up 0.87 percent, and Kinross Gold (K.TO) dropped 1.19 percent. Eldorado Gold Corp. (ELD.TO) shed 3.05 percent, while B2Gold (BTO.TO) edged up 0.32 percent.
The Materials Index edged down 0.08 percent with Potash Corporation of Saskatchewan Inc. (POT.TO) inching up 0.69 percent and Eastern Platinum Limited (ELR.TO) was up over 10 percent.
An Energy Information Administration weekly crude oil report showed U.S. commercial crude oil inventories to have increased by 2.20 million barrels to 384.70 million barrels last week, above the upper limit of the average range for this time of year. Analysts expected crude oil inventories to gain 100,000 barrels for the week.
U.S. crude oil futures for July delivery Thursday dropped $1.29 or 1.5 percent to close at $86.53 a barrel on the NYMEX.
The Energy Index gained 0.08 percent with Suncor Energy Inc. (SU.TO) down 0.43 percent, while Canadian Natural Resources Limited (CNQ.TO) dropped 0.64 percent. Ithaca Energy Inc. (IAE.TO) gained 9.83 percent, while Encana Corp (ECA.TO) gained 1.03 percent.
Heavyweights transportation systems maker Bombardier Inc. (BBD.B.TO) shed 2.07 percent, while smartphone maker Research In Motion Limited (RIM) edged up 0.38 percent.
The Financial Index gained 1.54 percent as Manulife Financial Corp. (MFC.TO) gained 2.11 percent, Sun Life Financial Inc. (SLF.TO) was up 3.50 percent, and Royal Bank of Canada (RY.TO) gathered 1.80 percent. Bank of Nova Scotia (BNS.TO) edged up 1.53 percent, while TD Bank (TD.TO) gained 1.38 percent.
National Bank of Canada (NA.TO) edged up 0.71 percent after posting a much improved second quarter net income at C$536 million or C$3.22 per share compared to C$310 million or C$1.57 per share a year ago. Excluding items, earnings per share totaled C$1.95, up 10 percent from the same quarter last year. Analysts were expecting the bank to report earnings pf C$1.85 per share this quarter.
The Canadian Imperial Bank Of Commerce (CM.TO) gained 2.47 percent after posting higher second-quarter net income of C$811 million or C$1.90 per share, with adjusted earnings of C$2.00 per share. Analysts expected earnings of C$1.88 per share for the quarter.
Industrial machinery dealer CE Franklin Ltd. (CFT.TO) said it has agreed to be acquired by NOV Distribution Services ULC, an unit of oil and gas equipment and services company National Oilwell Varco Inc. (NOV) for consideration of C$12.75 in cash per common share. The stock surged over 35 percent.
Information technology services provider CGI Group Inc. (GIB_A.TO) gained nearly 14 percent after indicating its wholly owned unit CGI Holdings Europe Limited would acquire Logica plc (LOG.L). Logica Shareholders would be entitled to receive 105 pence in cash per Logica Share. The purchase price represents a premium of about 59.8 percent to the latest closing price per Logica Share of 65.70 pence
Gaming software maker Amaya Gaming Group Inc.(AYA.V) rose 1.32 percent after announcing that it has extended its buyout offered for CryptoLogic Ltd. (CRY.TO) until 5.00 p.m. London time on 25 June 2012, unless otherwise extended. In December 2011, Amaya Gaming Group has said it offered to buy CryptoLogic for $2.50 per share, estimated to total about $34.5 million.
Logistics technology solutions provider Descartes Systems Group (DSG.TO) added 1.67 percent after reporting a first quarter profit of $2.61 million or $0.04 per share, up from the prior year's $2.15 million or $0.03 per share.
In economic news, Statistics Canada said the nation's current account deficit, on a seasonally adjusted basis, expanded by $0.6 billion to $10.3 billion in the first quarter, as a lower surplus on goods was partly offset by a lower deficit on investment income. Total exports of goods declined $1.3 billion to $120.2 billion, while imports of goods remained largely unchanged at $117.8 billion in the first quarter.
In economic news from the U.S., the ADP said private sector employment rose by 133,000 jobs in May following a downwardly revised increase of 113,000 jobs in April. Economists had expected an increase of about 154,000 jobs compared to the addition of 119,000 jobs originally reported for the previous month.
The U.S. Labor Department said new unemployment claims came in at a seasonally adjusted level of 383,000 for the week ending May 26, up 10,000 from the previous week's revised level of 373,000. The initial unemployment claims level was higher than the predictions of most economists who had expected new claims to hold steady at the 370,000 level initially reported for the previous week.
India's gross domestic product expanded only 5.3 percent from a year ago, marking the fourth successive quarter of slowdown. Economists expected the annual growth rate to remain unchanged at 6.1 percent, from the December quarter. During the March quarter of 2011, GDP was up 9.2 percent. For the full-year, the GDP growth was 6.5 percent, short of the 6.9 percent forecast.
Elsewhere, eurozone inflation slowed more than expected in May, flash estimates from Eurostat showed. Annual inflation fell to 2.4 percent from 2.6 percent in April. The rate was slightly below the expected rate of 2.5 percent. Nonetheless, inflation continues to stay above the European Central Bank's 'below, but close to 2 percent' target.
Data released by the Federal Statistics Office showed that Germany's retail sales increased at a slower pace in April, but the rate of growth exceeded economists' forecast. Separately, the agency said unemployment rate in Germany declined marginally in April. The adjusted unemployment rate fell to 5.4 percent in April from 5.5 percent in March. In April last year, the rate was 6.1 percent.
by RTT Staff Writer
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