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Latest Headlines
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Feb 9, 2010 7:37:00 AM MST
Stocks higher, hopes grow EU will help Greece with its growing debt burden (Dollar-Markets)
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TORONTO _ Hopes that European leaders will tackle the problem of huge debt levels racked up by several governments pushed stock markets sharply higher Tuesday morning.
The S&P/TSX composite index rose 143.4 points to 11,258.7. The Canadian dollar was up 0.51 of a cent to 93.58 cents US.
Stock markets have lost ground recently over fear spreading about unsustainable debt loads taken on by some European countries, particularly Spain, Portugal and Greece. Markets doubt that governments have the political will necessary to impose austerity measures to get large deficits under control. And there are worries that the sovereign debt issue has the potential to detail a global economic recovery.
And although the European Investment Bank said Tuesday it would not be able, according to its own rules, to offer Greece or any other country a bailout, investors are betting that a meeting on Thursday of EU heads of state will address the market´s worry about sovereign debt.
"This meeting of EU leaders is set to discuss the economic road map of the eurozone for the next 10 years however, it is difficult to see how the problems of Greece and other vulnerable indebted nations won´t overshadow the summit," said Michael Hewson, an analyst at CMC Markets.
He said a bailout would be very problematic, since that would urge other heavily-indebted countries to seek the same treatment.
Hopes for a bailout or some form of aid also grew on news that European Central Bank President Jean-Claude Trichet was returning home from a summit in Sydney a day earlier than planned.
Meanwhile, the base metals sector led TSX gainers, up four per cent as March copper added four cents to US$2.94 a pound and investors also took in major earnings reports from the commodity sector.
Teck Resources Ltd. (TSX:TCK.B) said Monday it earned $411 million in its latest quarter as revenue increased 35 per cent compared with a year ago, helped by sharply higher copper and zinc revenue but offset by lower coal prices. The mining company said its profit amounted to 70 cents per diluted share compared with a loss of $607 million or $1.27 per diluted share a year ago. Teck shares gained $1.71 to C$36.21.
Fertilizer producer Agrium Inc. (TSX:AGU) reported fourth-quarter profit came in at US$30 million, down sharply from $124 million a year earlier when it and other fertilizer producers were still reaping the rewards of strong demand and high prices. Agrium´s net sales fell to $1.44 billion in the fourth quarter of 2009, down from US$1.94 billion in the comparable period of 2008 and its shares gained $2.85 to $64.87. Shares in rival Potash Corp. (TSX:POT) advanced $3.46 to $112.80.
Inmet Mining Corp. (TSX:IMN) shares moved ahead $2.36 to US$55.21 as the company reported an $89.8-million profit in the fourth quarter, a turnaround from the $32.5-million loss that the Toronto-based company had a year earlier. Sales revenue more than doubled to $290.6 million.
And Western Coal Corp. (TSX:WTN) shares ran ahead 29 cents to $3.44 after it said its quarterly profit fell to $24 million or nine cents per diluted share. That was down from a profit of $62.5 million or 29 cents per share in the year-earlier period. Revenue fell to $118.7 million from $176.6 million in the final three months of 2008.
The TSX energy sector advanced one per cent as a weakening U.S. dollar offset concerns about the strength of the global economic recovery. The March crude contract on the New York Mercantile Exchange was up $1.12 to US$73.01 a barrel. Suncor Energy (TSX:SU) gained 89 cents to $32.17.
Husky Energy Inc. (TSX:HSE) shares gained six cents to $26.70 after the company announced its third significant discovery in the South China Sea. The Calgary-based company said Monday that an exploration well in the waters south of Hong Kong tested natural gas at an equipment restricted rate of 57 million cubic feet per day, with indications the Liuhua 29-1 well could produce more than 90 million cubic feet of gas per day in the future.
And shares in Pacific Rubiales Energy Corp. (TSX:PRE) climbed 14 cents to $14.22 after the company announced a new discovery at its Quifa-6 oil well in the Llanos Basin off Colombia and a successful appraisal at the nearby Quifa-18 well.
The April gold bullion contract on the Nymex climbed $7.50 to US$1,073.70 an ounce, pushing the gold index up 3.17 per cent. Goldcorp Inc. (TSX:G) advanced $1.42 to $38.30 while Barrick Gold Corp. (TSX:ABX) improved $1.02 to $38.06.
All TSX sectors advanced with the financial group up almost one per cent. Manulife Financial (TSX:MFC) was ahead 20 cents to $19.17 while Royal Bank (TSX:RY) rose 52 cents to $53.58.
The TSX Venture Exchange gained 7.73 points to 1,468.33.
New York markets also gained ground with the Dow Jones industrials up 155.7 points to 10,064.1.
The Nasdaq composite index gained 25.98 points to 2,152.03 while the S&P 500 gained 4.7 points to 1,070.9.
In other earnings news, Molson Coors (NYSE:TAP) says its fourth-quarter profit more than doubled to US$218.2 million because of favourable tax benefits. Worldwide beer volume sold fell four per cent as people cut back on their purchases but higher prices helped drive an 11 per cent rise in revenue to US$820.8 million. Its shares in New York inched 14 cents lower to US$41.17 while Molson Coors Canada shares (TSX:TPX.B) were off 45 cents to $44.40.
Oilsands company Opti Canada Inc. (TSX:OPC) had a loss of $212 million or 75 cents per share in its fourth quarter of 2009. That´s a reduction from the year-earlier loss of $410 million or $2.09 per share. The Calgary-based oilsands company´s revenue also fell, to $43 million in the final quarter of 2009 from $69 million a year earlier. Opti Canada shares slipped six cents to $1.85.
Toyota says it is recalling about 437,000 Prius and other hybrid vehicles worldwide to fix brake problems. With the Prius announcement, the number of vehicles recalled globally by the automaker has ballooned to 8.5 million, including for floor mats which can trap gas pedals and faulty gas pedals that are slow to return to the idle position. Its shares moved up US$2.52 to $75.37 in New York.
Overseas, Tokyo´s Nikkei 225 stock average lost 0.2 per cent.
Chinese markets fared better, but trading has been listless as investors hunkered down ahead of a week-long closure of mainland exchanges for next week´s Lunar New Year holiday. The benchmark Shanghai Composite Index gained 0.5 per cent and Hong Kong´s Hang Seng index advanced 1.2 per cent.
London´s FTSE 100 index was ahead 0.68 per cent, Frankfurt´s DAX gained 0.67 per cent while the Paris CAC 40 advanced 0.62 per cent.
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