Stocks close mixed, C$ down

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The Toronto stock market rose sharply Wednesday as an unexpectedly positive dose of U.S. economic data raised hopes for an economic recovery.

Also, the U.S. Federal Reserve chimed in with news that although the economy will likely remain weak, the lid will be kept on inflation and the pace of contraction is slowing.

"Following on its April meeting assessment, that the pace of economic contraction was slowing, that household spending was stabilizing, and that the outlook had improved modestly; today’s tone was basically the same," said Andrew Pyle, investment adviser with ScotiaMcLeod in Peterborough, Ont.

The S&P/TSX composite index moved up 204.21 points to 10,100.93 following a 63-point advance on Tuesday.

The rise only partially offset a 454-point plunge on Monday, which was triggered by a World Bank report that global economic contraction this year would be worse than thought.

"There are no fundamentals to this market — it’s all trading on sentiment," said John Stephenson, portfolio manager at First Asset Funds Inc.

Stephenson is optimistic that there will be indications of a real firming in the global economy during the last quarter of 2009.

But in the meantime, "I’m forecasting a pullback over the next several months and I think that’s a reasonable expectation investors should have because we have not had 40% improvement in the fundamentals even though we have had a big move in the market."

TSX gains were led by a 2.75% gain in the financial sector as Royal Bank gained $1.43 to $45.49.

Investment management firm AGF Management Ltd. said second quarter profits were down 61% from a year ago to $17.2 million. AGF said profits and revenues were dragged down by continued global market weakness. Its shares were ahead 60 cents to $11.61.

A multibillion-dollar takeover offer for Toronto-listed Addax Petroleum helped lift energy stocks. Geneva based Addax said Wednesday it has reached a deal that will see it be acquired by Chinese oil and gas giant Sinopec International Petroleum Exploration and Production Corp. for $8.27 billion. The wholly-owned subsidiary of China Petrochemical Corp. will pay $52.80 per share. Its shares rose $3.31 to $48.96.

Overall, the energy sector was 1.5% higher even as the August crude contract in New York dipped 57 cents to US$68.67 a barrel. Sector heavyweight EnCana Corp. gained 63 cents to $55.66.

The Canadian dollar lost early gains to move down 0.19 of a cent to 86.77 cents US.

The TSX Venture Exchange was 16.48 points higher to 1,090.66.

In New York, the Dow Jones industrial average had been up more than 100 points in the wake of of the U.S. Commerce Department report of a 1.8% rise in May orders for big-ticket items. Economists surveyed by Thomson Reuters were anticipating a decline of 0.6%.

But the blue-chip index closed down 23.05 points at 8,299.86 in the wake of the Fed’s announcement, despite its positive take on inflation.

The Fed also held a key bank lending rate at a record low of between zero and 0.25%, and pledged again to keep it there for an extended period to help brace activity going forward.

The Nasdaq composite index gained 27.42 points to 1,792.34 supported by a strong earnings report from software maker Oracle Corp. while the S&P 500 index rose 5.84 points to 900.94.

The durable goods followed an earlier report from the Organization for Economic Co-operation and Development that said that the deepest global recession in over 60 years is close to bottoming out. It also warned recovery will be weak unless governments take further action to remove uncertainty over banks balance sheets.

But while its previous March forecast saw OECD economies contracting in both 2009 and 2010, the new forecast expects the 30 advanced OECD economies to contract by 4.1% in 2009 followed by growth of 0.7% in 2010.

Elsewhere on the TSX, the base metals sector higher as the price of copper gained 6.8 cents to US$2.268 a pound. Teck Resources gained 66 cents to $18.50.

The August bullion contract on the Nymex rose $10.10 to US$934.40 an ounce and the gold sector rose. Yamana Gold Inc. gained 33 cents to $10.44.

In other corporate news, aerospace maker Boeing was again a weight on the Dow industrials, losing $2.58 to US$41.29, on top of a similar decline Tuesday, after the company said there will be further delays in its 787 Dreamliner program. Also, Morgan Stanley downgraded the company to equal weight from overweight.

Oracle Corp.’s results for its latest quarter topped Wall Streets forecast Tuesday, despite a 5% drop in sales and a 7% decline in profit. The company blamed the declines on the effects of a stronger U.S. dollar, which makes deals done in other currencies translate into fewer greenbacks. Its shares headed up $1.39 to $21.26.

(THE CANADIAN PRESS)

North American markets

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	Close	Change	YTD
Dow Jones	8,299.86	-23.05 or -0.28%	-5.43%
S&P 500	900.94	+5.84 or +0.65%	-0.26%
NASDAQ	1,792.34	+27.42 or +1.55%	+13.65%
TSX Composite	10,100.93	+204.21 or +2.06%	+12.39%

International markets

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	Close	Change	YTD
Nikkei	9,590.32	+40.71 or +0.43%	+8.25%
Hang Seng	17,892.15	+353.78 or +2.02%	+24.36%
SENSEX	14,422.73	+98.72 or +0.69%	+49.50%
FTSE 100	4,279.98	+49.96 or +1.18%	-3.48%
CAC 40	3,184.76	+67.94 or +2.18%	-1.03%
DAX	4,836.01	+128.86 or +2.74%	+0.54%

Bonds

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Bonds	$Current	$Previous	%Yield
Cdn. 10-year bond	102.51	102.73	3.45
Cdn. 30-year bond	118.59	119.04	3.90
U.S. 10-year bond	95.31	95.72	3.69
U.S. 30-year bond	96.97	97.89	4.43

Currency

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BoC Close	Today	Previous
Canadian $	0.8677	0.8696
US $	1.1525	1.1500

Euro Spot Rate	Today	Previous
Canadian $	0.6224	0.6178
Euro	1.6066	1.6187

Commodities

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Gold	AM	PM
London Gold Fix ($US)	$928.75	$933.50

Oil	Close	Change
WTI Crude Future (US)	$68.66	-$0.58 or -0.84%

(06/24/09)