Canadian stocks were extending gains for a fourth straight session Friday morning as risk appetite improved after the Federal Reserve embarked on a third round of quantitative easing and promised to keep interest at rock-bottom rates until mid-2015.
The S&P/TSX Composite Index surged 153.79 points or 1.24 percent to 12,513.95, after adding nearly 150 points or just over 1 percent in the past three straight sessions.
The Diversified Materials Index was the biggest gainer, adding 6 percent. First Quantum Minerals (FM.TO) surged over 7 percent, while Inmet Mining (IMN.TO) and Teck Resources (TCK_B.TO) were gaingina round 6 percent each.
In the commodity market, the price of crude oil gained Friday morning as demand worries eased after the Federal Reserve announced the much awaited monetary stimulus measures. Prices were also supported by increasing tensions in the Middle East, with the U.S. Ambassador to Libya killed and protests spreading to more locations in the Arab world targeting the U.S. Crude for October gained $1.29 to $99.60 a barrel.
In the oil patch, Baytex Energy Corp. (BTE.TO), Suncor Energy (SU.TO), Pacific Rubiales Energy (PRE.TO) and MEG Energy (MEG.TO) rose over 3 percent each.
The price of gold was steady around its six-month high Friday morning as the U.S. dollar was trading lower versus a basket of currencies after the Federal Reserve announced the much anticipated QE3. Gold for December added $3.70 to $1,775.80 an ounce.
Among gold plays, Royal Gold (RGL.TO) and Agnico-Eagle Mines (AEM.TO) gathered over 2 percent each.
Communications equipment manufacturing company Evertz Technologies Ltd. (ET.TO) gained over 2 percent after reporting improved first quarter profit at C$24.8 million or C$0.34 per share compared to C$17.6 million or C$0.23 per share in the same period last year. Analysts were expecting the company to earn C$0.25 per share for the first quarter.
Meanwhile, Golden Minerals Company (AUM.TO) dived 15 percent after announcing that it has entered into an underwriting agreement with Wells Fargo Securities to sell 5,497,504 units at a price of $5.75 per unit.
Contact lenses retailer Coastal Contacts Inc. (COA.TO) reported a wider third quarter net loss at C$1.9 million or C$0.07 per share compared to C$1.5 million or C$0.06 per share in the year-earlier quarter. Analysts were expecting the company to report breakeven earnings for the quarter. The stock shed nearly 3 percent.
In economic news, Statistics Canada said manufacturing sales fell 1.5 percent to $48.3 billion in July mainly due to declines in transportation equipment. Manufacturers in 11 of 21 industries reported lower sales, representing over 60 percent of total manufacturing. Moreover, inventories rose 1.0 percent in July to $65.5 billion, led by increases in the aerospace product and parts, and machinery industries
From the U.S, the Labor Department said its consumer price index rose by 0.6 percent in August after coming in flat in three of the four previous months. The increase in prices matched the expectations of economists. Core consumer prices, which exclude food and energy prices, edged up by a more modest 0.1 percent in August, matching the increase seen in July. Economists had expected core prices to rise by 0.2 percent.
Meanwhile, a report from the Commerce Department put the advance estimate of retail sales for August at a seasonally adjusted level of $406.7 billion, a 0.9 percent increase from revised July levels and the strongest monthly growth since February. Excluding the automotive sector, retail sales for August remained up a strong 0.8 percent, matching the expectations of most economists.
Elsewhere, euro zone inflation increased as initially estimated to 2.6 percent in August, final data issued by Eurostat showed Friday. The rate rose from 2.4 percent in July. The central bank aims to retain inflation rates below, but close to, 2 percent over the medium term. Month-on-month, consumer prices were up 0.4 percent, in line with economists' expectations.
A separate report from the Eurostat revealed that the number of persons employed remained stable in the euro area during the second quarter, after falling 0.3 percent sequentially in the prior quarter.
by RTT Staff Writer
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