VANCOUVER — Canadian stock markets climbed for a second day after January pending home sales rose in the U.S. and the European Union signalled support for Greece’s plan to rein in its budget deficit.
Commodity prices rose and the U.S. dollar fell against the euro after the European Commission president said the Greek austerity measures would win support from the governments in the region. The yield on Greece’s 10-year bonds has soared to 6.75 per cent, more than double the yield on Germany’s debt. The Mediterranean nation is grappling with a credit crisis brought on by a government deficit this year expected to equal 12.7 per cent of Greece’s total economic output.
The decline in the U.S. dollar helped send gold higher — the April contract added $13, or 1.2 per cent, to $1,118 US — as well as oil, with March crude advancing $2.80, or 3.8 per cent, to $77.23 US a barrel. Natural gas rose nine cents to $5.454 US per million Btu, after climbing 23 cents Monday. Copper also moved up, trading as high as $3.1245 US after briefly dropping below $3.00 US Monday to its lowest level since November. The Canadian dollar added 38 basis points to 94.51 cents US.
The S&P/TSX Composite index gained 90.79 points, or 0.8 per cent, to 11.408.34. With Monday’s 223-point rise, the senior Canadian benchmark has recovered nearly half its January losses — 652 points — in two sessions. The S&P/TSX Venture composite added 7.13, or 0.5 per cent, to 1,517.07.
Tuesday’s gains on the TSX would have been bigger were it not for Suncor — shares tumbled $1.99, or 5.7 per cent, to $32.85, trimming $3.3 billion from the market cap of the biggest Canadian oil producer. Since merging with Petro-Canada, Suncor has become the biggest non-financial company in the S&P/TSX, but shares have fallen 15 per cent since Jan. 11, along with the price of crude. Tuesday’s drop followed the release of disappointing Q4 earnings and production data — profits of $457 million, or 29 cents a share, and output of 644,000 barrels a day. Both fell well short of Street expectations. The company sold 98 Petro-Canada gas stations following the merger, as well as U.S. natural gas properties worth $494 million US, laying off 1,000 staff in the process. More asset sales and layoffs are expected as the company concentrates on its Alberta-based heavy oil business.
Fortress Paper, maker of specialty papers for currency and security documents, gained 45 cents, or four per cent, to $11.90. Shares are up 25 per cent so far in 2010. The North Vancouver-based company won a $10-million, five-year contract Jan. 14 to supply 2.5 million electronic passports to an unnamed government.
Vancouver-based CanWel Building Materials Group completed its $81 million acquisition of Weyerhaeuser’s former network of 14 building materials distribution centres. CanWel also completed its conversion from an income fund to a corporation. Shares rose 35 cents, or 7.5 per cent, to $5.01.
On Wall Street, the Dow Jones Industrial Average gained 111.32 points, or 1.1 per cent, to 10,296.85, the S&P 500 added 14.13, or 1.3 per cent, to 1,103.32, and the Nasdaq composite rose 18.86, or 0.9 per cent, to 2,190.06. Ford climbed 27 cents, or 2.7 per cent, to $11.39 US after its sales shot up 24 per cent in January, due in part to problems at Toyota. Sales plunged 16 per cent in January at Toyota, owing in large part to problems with faulty gas pedals that led to a massive international recall.
