Obama plan for infrastructure spending sends stocks surging
The Toronto stock market held on to large gains late in the session today, led by solid advances in energy and financial stocks.
New York was also up sharply with investors feeling better after president-elect Barack Obama unveiled the largest U.S. public works plan since the 1950s.
Just before the close, Toronto's S&P/TSX composite index was up 500.6 points or 6.17 per cent to 8,617.63.
New York's Dow Jones industrial average moved up 327.59 points to 8,963.01.
The Canadian dollar climbed 1.17 cents to 79.85 cents US as traders looked ahead to an expected interest-rate cut of at least a half percentage point by the Bank of Canada tomorrow.
The TSX energy sector jumped almost eight per cent as the January crude contract on the New York Mercantile Exchange moved up $2.90 to US$43.71 a barrel.
Investors also took in news of a sharp retracement in the housing sector. Canada Mortgage and Housing Corp. reported that housing starts fell to 172,000 at a seasonally adjusted annual rate in November, down from 211,800 in October.
The data coincided with an RBC Economics report that Canada's housing sector is entering a cyclical downturn but the risk of a U.S.-style meltdown is remote.
The TSX Venture Exchange moved up 13.63 points to 697.94.
The Nasdaq composite index rose 50.08 points to 1,559.39. The S&P 500 improved 31.87 points to 907.94 after Obama's weekend announcement of his recovery plan.
That came on the heels of Friday's statistics showing 533,000 jobs were lost in the United States during November, while Canada shed 71,000.
"Over the last six weeks people really lost confidence," said Kate Warne, Canadian market specialist at Edward Jones in St. Louis.
She noted that Obama may not be able to push through as much spending as he would like, but the leadership he is showing is "giving investors a bit more confidence that actions will continue to be taken until the economy begins to improve."
Investors also appeared more comfortable that the U quick pay day loans.S. and Canadian governments are closer to doling out billions of dollars to the Detroit Three auto makers.
The TSX energy sector moved up almost eight per cent as oil prices bounced off multi-year lows after the president of the Organization of Petroleum Exporting Countries hinted at a "severe" production cut at OPEC's meeting Dec. 17. Light sweet crude rose $3.44 to US$44.25 a barrel on the New York Mercantile Exchange, after dropping almost $3 on Friday.
EnCana Corp. (TSX: ECA) shot up $4.79 to $55.65 on the TSX while Canadian Natural Resources (TSX: CNQ) gained $2.93 to $42.26.
Financials jumped 4.5 per cent as Royal Bank (TSX: RY) rose $1.94 to $38.34 and Bank of Montreal (TSX: BMO) advanced $1.52 to $36.42.
The base-metals sector jumped almost 10 per cent while beaten-down copper surged 11.5 cents to US$1.4885 a pound, sending Teck Cominco Ltd. (TSX: TCK.B) up 35 cents to $4.28 while FNX Mining Co. (TSX: FNX) added 42 cents or 19 per cent to $2.59.
Anvil Mining Ltd. (TSX: AVM) said it is putting the Dikulushi mine in the Democratic Republic of Congo on care and maintenance "until the price of copper recovers." Its shares added one cent to 91 cents.
Gold stocks ran up as bullion rose $24.70 to US$776.90 an ounce. Goldcorp Inc. (TSX: G) gained $2.30 to $30.15.
JLL Partners Inc. of New York has made a bid for the 71 per cent of Patheon Inc. (TSX: PTI) it does not already own, offering US$2 per share for the international drug manufacturer. Patheon shares rocketed 89 cents or 83 per cent to C$1.96.
On overseas stock markets, Hong Kong's Hang Seng index vaulted up 8.7 per cent to its highest close in seven weeks, while Japan's Nikkei average gained 5.2 per cent.
The FTSE 100 index is up 6.15 per cent in London, while the German DAX gained 8.7 per cent and the Paris CAC 40 was up 8.4 per cent.