Toronto stock market advances amid rising oil prices, IMF announcement

TORONTO – The Toronto stock market was higher Wednesday morning on rising resource and financial sector stocks that benefited from word the International Monetary Fund is looking to bolster its financial firepower to help deal with a global economic crisis.
The S&P/TSX composite index gained 99.58 points to 12,332.41 while the TSX Venture Exchange climbed 5.69 points to 1,543.41. The Canadian dollar edged up 0.21 of a cent to 98.71 cents US.
The IMF said it aims to add US$500 billion to its resources so it can give out new loans to help mitigate a worsening financial crisis. The Washington-based institution said its staff estimates that countries around the world will need about $1 trillion in loans over the coming years. Most of the concerns centre on the 17-nation eurozone, which has been embroiled in a debt crisis for around two years.
Thanks to some $200 billion that European countries have recently promised to the IMF, it is already more than one third on its way to reaching its fundraising goal.
U.S. markets were higher after investment bank Goldman Sachs delivered quarterly earnings that beat expectations.
It said net income fell 58 per cent to US$1 billion or $1.84 a share because of lower investment banking fees in a quarter marked by choppy financial markets. But that easily beat expectations of $1.28 a share.
Goldman’s quarterly revenue fell 30 per cent to $6 billion and its shares were ahead $5.09 or 5.21 per cent to US$102.77.
The Dow Jones industrial index was ahead 56.69 points to 12,538.76. The Nasdaq composite index gained 22.57 points to 2,750.65 while the S&P 500 index climbed 7.29 points to 1,300.96.
Sentiment was also helped along by data out Wednesday showing that U.S. factory output surged in December by 0.9 per cent, the most in year. Stronger demand for business equipment, vehicles and energy offered the most visible evidence that manufacturing has roared back from the depths of the recession.
On the TSX, the financial sector rose 0.66 per cent while Royal Bank (TSX:RY) advanced 58 cents to $52.40 while Bank of Nova Scotia (TSX:BNS) gained 71 cents to $52.52.
Major dealmaking helped send the TSX industrials sector up 1.9. per cent. Shares in Finning International Inc. (TSX:FTT) climbed $1.35 or 5.53 per cent to $25.75 after it said it will acquire the Caterpillar distribution and support business formerly operated by Bucyrus in South America, the U.K., and Western Canada. The deal is worth US$465 million. Vancouver-based Finning is the world’s biggest Caterpillar dealer.
Canadian National Railways (TSX:CNR) advanced 97 cents to $78.89.
The energy sector ran up 1.13 per cent as the February crude contract on the New York Mercantile Exchange improved on Tuesday’s $2 jump, rising 53 cents to US$101.24. Traders had been encouraged by data showing that China, the world’s second largest economy, reported 8.9 per cent growth in the fourth quarter, slower than the previous quarter but strong enough to indicate it would avoid an abrupt slowdown.
And in the U.S., government data showed manufacturing in New York expanded at the fastest pace in nine months.
Analysts said higher oil was also supported by tension between Iran and Saudi Arabia, as well as a move by France to accelerate the EU’s implementation of an embargo on Iranian oil exports.
Saudi Oil Minister Ali al-Naimi has said Saudi Arabia was ready to pump more oil if needed to make up for a shortfall in Iranian exports. That came as Iran warned Gulf nations not to make up any shortfall and that it may shut the Strait of Hormuz, which is used to transport about a fifth of the world’s oil.
Suncor Energy (TSX:SU) gained 69 cents to $33.91 and Cenovus Energy (TSX:CVE) climbed 83 cents to $35.89.
The base metals sector gained 1.18 per cent as other commodity prices were weak with March copper ahead two cents at US$3.75 a pound after the Chinese economic report in particular sent the metal jumping nine cents Tuesday. China is the world’s biggest copper consumer. Teck Resources (TSX:TCK.B) was up 94 cents to $40.79 while HudBay Minerals (TSX:HBM) was ahead 26 cents to $10.96.
The gold sector was 0.34 per cent higher even as February gold on the Nymex dropped $3.10 to US$1,652.50 an ounce. Goldcorp Inc. (TSX:G) climbed 32 cents to $45.99.
The consumer discretionary sector provided lift with auto parts giant Magna International (TSX:MG) ahead 95 cents to $40.95.
Investors also digested analysis from The World Bank which warned Wednesday of a possible slump in global economic growth. It also urged developing countries to prepare for shocks that could be more severe than the 2008 crisis.
The bank cut its growth forecast for developing countries this year to 5.4 per cent from 6.2 per cent and for developed countries to 1.4 per cent from 2.7 per cent. For the 17 countries that use the euro currency, it forecast a contraction, with a growth outlook to be negative 0.3 per cent from growth of 1.8 per cent.
European markets were mainly higher as London’s FTSE 100 index inched up 0.07 per cent, Frankfurt’s DAX was up 0.37 per cent while the Paris CAC 40 lost 0.23 per cent.
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