Energy stocks send TSX surging; N.Y. stocks jump

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

Energy stocks helped the Toronto stock market gain more than 200 points for a second day in a row Thursday on hopes that small signs of economic improvement will result in the start of a recovery by the end of the year.

Toronto’s S&P/TSX composite index advanced 254.92 points to 10,355.85, following a 204-point runup on Wednesday.

The Canadian dollar was down 0.28 of a cent to 86.49 cents US.

The TSX Venture Exchange rose 12.39 points to 1,103.05.

The energy sector rose just over 4% Thursday as the July crude contract on the New York Mercantile Exchange moved up $1.56 to US$70.23 a barrel after the U.S. government said that the economy may be faring better than previously thought.

Crude prices had fallen from an eight-month high near US$73 earlier this month on investor doubts that demand in a weak U.S. economy may not justify the stock and commodity rally since March.

Traders also took in news that Alberta has announced a one-year extension to two incentive programs designed to encourage natural gas drilling, which has fallen off because of low commodity prices. In March, the Alberta government announced a $200-per-metre royalty credit to companies on a sliding scale based on their 2008 production levels. It also introduced a well incentive program, which would offer a maximum 5% royalty rate for the first year of production from new oil and gas wells.

EnCana Corp. climbed $1.92 to $57.58 and Suncor Inc. was ahead $1.82 to $35.17.

New York markets started off negative following data showing that U.S. claims for jobless insurance rose unexpectedly last week. But another report showed the U.S. economy tumbled at a 5.5% pace in the first quarter, an improvement from the initial 5.7% annualized decline reported a month ago.

But buying sentiment picked up in the afternoon in large part because of gains in homebuilders, retailers and other consumer discretionary stocks.

The Dow Jones industrial average gained 172.54 points to 8,472.4. The Nasdaq composite index was up 37.2 points to 1,829.54 while the S&P 500 index was 19.32 points higher to 920.26.

Joe Saluzzi, co-head of equity trading at Themis Trading LLC in New York, said some of the day’s gains likely reflect portfolio managers buying up stocks to pump up their returns ahead of the end of the quarter on Tuesday.

"I think the window dressing is a big deal," he said. "There’s just a force underneath the market that wants to keep it higher."

Thursday’s broad-based advance on the TSX was the latest showing in a volatile week with investors trying to gauge the probability of a year-end recovery amid a variety of economic news, good and bad.

"The market is looking for direction, we have come so far, in such a short period of time that … investors are sitting there saying OK, where to from here?" said Philip Petursson, Director, Institutional Equities at MFC Global Investment Management.

He observed that the spring rally that took the TSX up as much as 41% since March 9 was partly based on economic news that wasn’t as bad as expected "but the truth of the matter is the economy is still in a recession, we are not seeing growth anywhere, it’s just contracting at a slower pace."

In New York, shares of homebuilders rallied after Lennar Corp. said orders for new homes jumped 63% during the second quarter and reported revenue that beat expectations.

Retailers and other consumer discretionary stocks rallied on an upbeat report from Bed Bath & Beyond Inc. The home furnishings store said its fiscal first-quarter profit climbed 14% as sales rose after the liquidation of rival Linens N Things.

Elsewhere on the TSX, the base metals sector picked up 3.6%. Ivanhoe Mines improved 54 cents to $6.59 and FNX Mining gained 66 cents to $8.62.

But Teck Resources Ltd. shares dipped three cents to $18.47 after it said a technical problem at a mine in Kamloops, B.C. is forcing the company to trim copper production for the next year and a half.

The Vancouver-based mining giant is cutting production by 35 million pounds in the second half of this year and by 115 million pounds next year due to the issues at the Highland Valley mine.

The August bullion contract in New York moved up $5.10 to US$939.50 an ounce and the gold sector was ahead 4.6%. Barrick Gold Corp. headed up $1.89 to $40.60.

Sectors outside the commodities group were also strong as the industrials sector moved up 2%. Canadian National Railways advanced $1.77 to $49.91.

And the financial sector rose 2.2% as TD Bank climbed $1.71 to $58.65.

In other corporate news, a plan has been formed for Toronto to secure all the funding it needs for a $1.2-billion streetcar contract. The project for 204 streetcars, to be built by Bombardier Inc., was contingent on securing a one-third share from Ottawa by Saturday. The Toronto Transit Commission says it will come up with $417 million itself. Bombardier shares were down five cents to $3.33.

(THE CANADIAN PRESS)

North American markets

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	Close	Change	YTD
Dow Jones	8,472.40	+172.54 or +2.08%	-3.46%
S&P 500	920.26	+19.32 or +2.14%	+1.88%
NASDAQ	1,829.54	+37.20 or +2.08%	+16.01%
TSX Composite	10,355.85	+254.92 or +2.52%	+15.22%

International markets

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	Close	Change	YTD
Nikkei	9,796.08	+205.76 or +2.15%	+10.57%
Hang Seng	18,275.03	+382.88 or +2.14%	+27.02%
SENSEX	14,345.62	-77.11 or -0.53%	+48.70%
FTSE 100	4,252.57	-27.41 or -0.64%	-4.10%
CAC 40	3,163.10	-21.66 or -0.68%	-1.71%
DAX	4,800.56	-35.45 or -0.73%	-0.20%

Bonds

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Bonds	$Current	$Previous	%Yield
Cdn. 10-year bond	102.81	102.51	3.41
Cdn. 30-year bond	118.59	118.59	3.90
U.S. 10-year bond	96.63	95.31	3.53
U.S. 30-year bond	98.77	96.97	4.32

Currency

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BoC Close	Today	Previous
Canadian $	0.8649	0.8677
US $	1.1562	1.1525

Euro Spot Rate	Today	Previous
Canadian $	0.6181	0.6224
Euro	1.6177	1.6066

Commodities

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Gold	AM	PM
London Gold Fix ($US)	$934.25	$937.25

Oil	Close	Change
WTI Crude Future (US)	$70.24	+$1.57 or +2.29%

(06/25/09)