Canadian stocks rallied to end higher Tuesday, mostly on energy issues after slipping into negative territory after the Federal Reserve Chairman Ben Bernanke offered little or no hints at any additional monetary support for the U.S. economy.
At home, the Bank of Canada left its key rates unchanged at one percent, as widely expected. The central bank noted that global headwinds were restraining Canadian economic activity, while domestic factors are expected to support moderate growth in Canada. The bank expects the economy to grow at a pace roughly in line with its production potential in the near term, before picking up through 2013.
In corporate news from the U.S., Goldman Sachs Group, Inc. (GS) said its second-quarter profit decreased to $927 million, from $1.05 billion in the same quarter last year. Earnings per common share were $1.78 compared with $1.85 for the second quarter of 2011. Analysts expected the company to report earnings of $1.17 per share for the quarter.
Toronto's main index, the S&P/TSX, closed Tuesday at 11,571.19, up 50.01 points or 0.43 percent. The S&P/TSX Composite Index touched an intraday high of 11,572.21 and a low of 11,479.52.
The TSX Venture Index closed at 1,176.75, down 6.60 points or 0.56 percent. The index opened at 1,185.51 compared to its previous close of 1,183.35.
Major gainers of the S&P/TSX Index were the Energy Index and the Industrial Index. Among the decliners were the Metals & Mining Index, the Materials Index, and the Global Gold Index.
U.S. crude oil futures for August delivery, gained $0.79 or 0.9 percent to close at $89.22 a barrel Tuesday on the NYMEX.
The Energy Index gained 1.35 percent with Canadian Natural Resources Limited (CNQ.TO) gaining 3.13 percent, Suncor Energy Inc. (SU.TO) up 0.91 percent,, and Encana Corp. (ECA.TO) gathering 3.05 percent.
Gold prices ended lower after the Federal Reserve Chairman Ben Bernanke offered no hint at any further quantitative easing in his testimony to the Congress. Gold futures for August delivery dropped $2.1 or 0.1 percent to close at $1,589.50 an ounce Tuesday on the NYMEX. The Global Gold Index shed 1.27 percent.
Among other gold stocks, AuRico Gold Inc. (AUQ.TO) plunged 13.17 percent, Barrick Gold Corp. (ABX.TO) surrendered 0.88 percent, and Kinross Gold Corp. (K.TO) slipped 3.79 percent.
The Materials Index dropped 0.39 percent, although Potash Corporation of Saskatchewan Inc. (POT.TO) gained 2.66 percent. Baja Mining Corp. (BAJ.TO) plunged 13.64 percent.
The Metals & Mining Index shed 0.63 percent with Lundin Mining Corp. (LUN.TO) dropping 2.70 percent and First Quantum Minerals Ltd. (FM.TO) slipping 1.94 percent. Teck Resources Limited (TCK.B.TO) gained 0.85 percent.
The Financial Index was up 0.18 percent with Royal Bank of Canada (RY.TO) up 0.31 percent, Bank of Nova Scotia (BNS.TO) down 0.15 percent, and Toronto-Dominion Bank (TD.TO) up 0.15 percent.
Heavyweight transportation systems maker Bombardier Inc. (BBD.B.TO) gained 1.03 percent, while Blackberry maker Research In Motion Limited (RIM.TO) slipped 0.99 percent.
The Industrial Index gained 1.05 percent with aerospace and industrial equipment maker Héroux-Devtek Inc. (HRX.TO) surging 32.74 percent after indicating it would be selling substantially all of its Aerostructure and Industrial Products operations to Precision Castparts Corp. (PCP) for C$300 million in cash.
Biological product company Neptune Technologies & Bioressources (NTB.TO) lost over 1 percent after reporting a wider first quarter net loss of $1.7 million.
In economic news Statistics Canada said manufacturing sales declined 0.4 percent to $48.7 billion in May, mainly due to a 9.6 percent dip in petroleum and coal product industry, reflecting temporary shutdowns at some refineries. Excluding the petroleum and coal product industry, total manufacturing sales rose 1.2 percent.
In economic news from the U.S., the Labor Department's consumer price index came in unchanged in June following a 0.3 percent drop in May. The reading was in line with economists' estimates. Excluding food and energy prices, core consumer price index rose by 0.2 percent in June. The modest increase matched the core price growth seen in the three previous months and came in line with expectations.
A Federal Reserve report on Tuesday showed industrial production in the U.S. increased slightly more than anticipated in June, partly due to a rebound by output in the manufacturing sector. Industrial production rose by 0.4 percent in June following a revised 0.2 percent decrease in May. Economists expected production to increase by 0.3 percent compared to the 0.1 percent drop originally reported for the previous month.
From the eurozone, German investor sentiment for July declined for a third straight month, according to a survey. The ZEW Indicator of Economic Sentiment dropped to minus 19.6 points from minus 16.9 in June. Nonetheless, it was slightly better than economists' forecast of minus 20.
Meanwhile, U.K.'s annual consumer price inflation eased for a third straight month in June to its lowest level since November 2009, helped by falling fuel prices and heavy discounting to boost sales, data from the Office for National Statistics showed.
by RTT Staff Writer
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