Energy stocks send TSX higher

| North American markets | International markets | Bonds | Currency | Commodities |

The Toronto stock market closed higher Tuesday, clawing back a tiny part of the previous day’s 4.4% plunge, in large part because of energy stocks rising alongside oil prices.

The main S&P/TSX composite index closed up 62.54 points to 9,896.72 following a 454-point selloff sparked by a World Bank report that warned the world economy will shrink 2.9% in 2009 compared with a previous forecast for a 1.7% decline.

Grim as the World Bank report was, analysts say investors were looking for an excuse to take some profits from the spring rally that started in mid-March and had boosted the TSX by as much as 41%.

"We needed to see a bit of a pullback," said Don Reed, president of Franklin Templeton Investments Corp. and manager of the Templeton International Stock Fund.

"In the best of all conditions, you have the markets advancing slowly and when it pulls back, it does the same thing but that’s not the environment that we are in. We’re in an environment where we see big moves both ways."

Since hitting a recent high on June 11th, the TSX has lost about 7.5%.

On Tuesday, the TSX energy sector clawed back a chunk of Monday’s slide of over 6%, rising 1.5% as the August crude contract in New York moved up $1.74 to US$69.24 after dropping $2.62 on Monday. Suncor Inc. gained 97 cents to $33.16.

The financial sector was the biggest weight on the TSX, down 1.55% with Royal Bank off $1.04 to $44.06.

The Canadian dollar was a fifth of a cent higher to 86.96 cents US.

The TSX Venture Exchange was down 4.48 points to 1,074.18.

U.S. markets were weak with the Dow Jones industrial average down 16.1 points to 8,322.91 after slumping 2.4%. The blue-chip index was weighed down by Boeing after the aerospace giant said it was again delaying the first test flight of its long-awaited 787 jetliner, saying it needs to reinforce part of the aircraft. Its shares fell $3.03 or 6.45% to US$43.87.

The Nasdaq points edged 1.27 points lower to 1,764.92 while the broader Standard & Poor’s 500 index rose 2.06 points to 895.1.

There was no joy to be had by U.S. economic news from the housing sector.

The U.S. National Association of Realtors says sales of previously occupied homes rose 2.4% to a seasonally adjusted annual rate of 4.77 million last month, from a downwardly revised pace of 4.66 million in April. Prices, meanwhile, dropped by 16.8% from a year ago.

The results missed economists’ expectations of 4.81 million units.

The U.S. Federal Reserve started its two-day meeting on monetary policy Tuesday. The Fed is widely expected to keep its key rate near zero, but investors are unsure how optimistic the policy makers will be in their economic assessment _ and whether the central bank is considering raising rates later this year to curb inflation.

Elsewhere on the Toronto market, the base metals sector was up 1% after sliding about 9% Monday. Copper prices rose seven cents to US$2.20 a pound, recovering more than half their steep slide Monday. Teck Resources rose $1.08 to $17.84 but Sherritt International lost 28 cents to $5.01.

The August bullion contract in New York rose $3.30 to US$924.30 and the gold index was the biggest percentage gainer on the TSX, up 4%. Barrick Gold Corp. gained $1.69 to $38.37.

Thomson Reuters wants to drop its listings on the London Stock Exchange and Nasdaq and move from a dual-listed company structure, saying its shareholder base has "changed considerably." The financial news and professional information firm, created by Thomson Corp.’s purchase of Reuters last year, said Monday it wants to trade only on the Toronto and New York exchanges. On the TSX, its shares were off 47 cents to $33.06.

Timminco Ltd. said Monday that it will resume production of silicon metal at its Becancour Silicon facilities due to improved market conditions and demand. The company said it will restart one of its three electric arc furnaces to fulfil newly contracted demand from a long-term customer and recall some of the workers who were temporarily laid off in May. Its shares climbed 35 cents or 29% to $1.54.

Imperial Oil Ltd. has received permission to repurchase up to 5% of its publicly traded stock over the next year. At current prices, that would cost the Calgary-based integrated oil company about $1.8 billion. Its shares rose 44 cents to $43.60. Shares in Bombardier Inc. lost seven cents to $3.25. The Canadian Auto Workers reached a tentative three-year agreement Tuesday with the aerospace company, avoiding a strike at the company’s airplane plant in Toronto.

(THE CANADIAN PRESS)

North American markets

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	Close	Change	YTD
Dow Jones	8,322.91	-16.10 or -0.19%	-5.17%
S&P 500	895.10	+2.06 or +0.23%	-0.90%
NASDAQ	1,764.92	-1.27 or -0.07%	+11.91%
TSX Composite	9,896.72	+62.54 or +0.64%	+10.11%

International markets

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	Close	Change	YTD
Nikkei	9,549.61	-276.66 or -2.82%	+7.79%
Hang Seng	17,538.37	-521.18 or -2.89%	+21.90%
SENSEX	14,324.01	-2.21 or -0.02%	+48.48%
FTSE 100	4,230.02	-4.03 or -0.10%	-4.60%
CAC 40	3,116.82	-6.43 or -0.21%	-3.14%
DAX	4,707.15	+13.75 or +0.29%	-2.14%

Bonds

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Bonds	$Current	$Previous	%Yield
Cdn. 10-year bond	102.73	102.68	3.42
Cdn. 30-year bond	119.04	118.59	3.88
U.S. 10-year bond	95.72	95.25	3.64
U.S. 30-year bond	97.89	96.72	4.38

Currency

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BoC Close	Today	Previous
Canadian $	0.8696	0.8676
US $	1.1500	1.1526

Euro Spot Rate	Today	Previous
Canadian $	0.6178	0.6259
Euro	1.6187	1.5976

Commodities

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Gold	AM	PM
London Gold Fix ($US)	$920.25	$920.75

Oil	Close	Change
WTI Crude Future (US)	$69.23	+$1.73 or +2.56%

(06/23/09)