Markets add to huge rally
The Toronto stock market was little changed late Wednesday morning, weighed down by falling energy and gold stocks.
But the overall tone was positive and New York markets moved sharply higher, adding to the large gains racked up Tuesday on the latest concerted move by global central banks to ease credit markets.
Toronto's S&P/TSX composite index gained 16.98 points to 12,361.51.
The market jumped 339 points or 2.6 per cent Tuesday after the Bank of Canada and other central banks injected billions of dollars into markets.
The U.S. Federal Reserve led the effort, committing US$200 billion to financial institutions for a term of 28 days, rather than overnight.
"I think the objective of the central banks right now is really just to keep putting band-aids and patches on the system," said Julie Brough, vice president of wealth management at Morgan, Meighen and Associates.
"Because what the system needs is time and to make sure that things hold together reasonably well to give things the time to work their way through."
The TSX Venture Exchange added 5.52 points to 2,672.89.
The Canadian dollar moved up 0.23 cent to 100.9 cents US.
New York's Dow Jones industrials moved 130.67 points higher to 12,287.48 after moving up 417 points or 3.55 per cent Tuesday.
The Nasdaq composite index was up 26.17 points to 2,281.93 after gaining 86 points and the S&P 500 index rose 11.33 points to 1,331.98.
The collapse in the U.S. housing sector has slashed the value of securities backing mortgages and resulted in a credit crisis with banks reluctant to loan to each other.
Investors are still counting on the U.S. Federal Reserve to continue cutting interest rates, although expectations are down somewhat for next week's scheduled announcement on rates.
Investors had been looking for a cut of three quarters of a point but after the central bank moves "it looks like the measures may be enough to push market expectations back towards a 50 basis point cut," said BMO Nesbitt Burns senior economist Jennifer Lee.
"After all, this is another way to ease the credit crunch, instead of reducing the funds rate."
The TSX financial sector was ahead 0.62 per cents as Scotiabank (TSX: BNS) rose 47 cents to $45.55 and TD Bank (TSX: TD) advanced 55 cents to $64.42.
The energy sector moved 1.35 per cent lower as oil prices fell following a report from the U.S. Department of Energy that crude oil supplies jumped by 6.2 million barrels last week. That's more than three times the 1.6 million barrel increase analysts expected.
At late morning, the April crude contract on the New York Mercantile Exchange was down 97 cents to US$107.78 a barrel after closing at another record high on Tuesday cash advance today. Petro-Canada (TSX: PCA) headed 77 cents lower to $46.28 while Suncor Energy (TSX: SU) fell $2.33 to $104.63.
Petrobank Energy and Resources Ltd.'s (TSX: PBG) fourth-quarter profit leaped ahead to $40.1 million from year-earlier $2.6 million on higher oil and natural gas revenue rises. But its shares were down $3.94 to $49.50 as market watchers speculated that investors may have been disappointed the company did not outline any new progress on its patented THAI oilsands technology.
Gold prices were slightly higher with the April bullion contract on the Nymex ahead $1.50 to US$977.50 an ounce. The gold sector was down one per cent with Agnico Eagle Mines (TSX: AEM) declined $1.04 to $71.27 while Alamos Gold (TSX: AGI) dropped 86 cents to $6.91.
Shares in tour operator Transat A.T. Inc. (TSX: TRZ.B) were down $2.04 to $24.03 after the company fell to a first-quarter loss of $10.1 million from a year-ago profit of $2 million on a $10.1-million after-tax charge for asset-backed commercial paper.
Revenues amounted to $787.4 million for the quarter, compared with $712.3 million in the same period last year.
Nortel Networks Corp. (TSX: NT) has introduced new optical technology that it says can quadruple network speed, giving carriers more power to meet the Internet's increasingly voracious appetite for more bandwidth. Its shares were ahead 32 cents to $6.95.
Inmet Mining Corp. (TSX: IMN) says workers at its Ok Tedi mine have launched an illegal strike that will lower the miner's 2008 copper production by 85 tonnes and gold production by 330 ounces for each day the strike continues. Inmet shares were off $1.21 to $82.04.
French judicial officials say a new trader at French bank Societe Generale has been taken in for questioning in connection with a multi billion dollar trading scandal. The bank announced in January a lone trader, Jerome Kerviel, made unauthorized trades that cost it nearly US$7 billion. He is being held in a Paris prison while the investigation continues.
Asian and European stocks rose Wednesday on word of the central banks moving to ease pressure on the world's credit markets.
Japan's Nikkei 225 index closed 1.6 per cent higher at 12,861.13 after rising as much as 3.2 per cent. Hong Kong's Hang Seng index pared gains to close 1.9 per cent higher at 23,422.76.