Commodity stocks power TSX higher as oil hits new record; N.Y. flat

Enlarge Photo
(The Canadian Press)

By The Canadian Press

TORONTO - Oil prices at a new record high helped send the Toronto stock market sharply higher Friday morning.

New York stock markets were flat following a better than expected reading on U.S. housing starts.

Toronto's S&P/TSX composite index moved 161.24 points higher to 14,989.3 after strong gains in financials and fertilizer giant Potash Corp. sent the index up 202 points Thursday to another record close.

The TSX Venture Exchange gained 17.32 points to 2,593.4 while the Canadian dollar rose 0.30 cent to 100.30 cents US.

New York's Dow Jones industrial average was off 3.83 points to 12,988.83 after moving up 94 points in the previous session.

The Nasdaq composite index dipped 1.29 points to 2,532.44 following a 37-point gain while the S&P 500 index added 0.58 of a point to 1,424.15.

The U.S. Commerce Department said construction of new homes rose in April by 8.2 per cent. The jump was largely due to an increase in apartment construction, and compares to forecasts of a 0.7 per cent decline.

General Electric Co. confirmed it plans to sell or spin off its century-old appliance division as part of a strategy to exit "slower growth and more volatile businesses."

The TSX energy sector moved up 1.6 per cent as the June crude contract on the New York Mercantile Exchange jumped $3.41 to an intraday record high of US$127.53 a barrel.

The sharp rise followed a volatile session Thursday where prices oscillated between US$120.75 and US$126.64. Oil ran ahead Friday on rumours that extra Chinese demand for diesel fuel to run emergency power generators after this week's deadly earthquake may tighten the distillates market.

EnCana Corp. (TSX: ECA.TO) gained $1.25 to $93.25 and Canadian Natural Resources (TSX: CNQ.TO) climbed $2.75 to $101.

Pacific Rubiales Energy Corp. (TSX: PEG.TO) reported a 76 per cent rise in first-quarter net sales to US$94.9 million, but stock-option expense and an unrealized foreign exchange loss dropped the Toronto-headquartered Colombian oil producer to a net loss of $53.2 million. Its shares moved ahead 30 cents to $11.80.

Questerre Energy Corp. (TSX: QEC.TO) shares surged 32 cents to $3.92 after it said Talisman Energy Canada (TSX: TLM.TO) has decided to drill three option wells under its farm-in agreement with Questerre in the St. Lawrence Lowlands of Quebec.

Gold prices were up sharply - the June bullion contract on the Nymex rose $17.90 to US$897.90 an ounce - and the TSX gold sector rose 2.3 per cent. Barrick Gold Corp. (TSX: ABX.TO) was up $1.20 to $40.25.

The base metals sector rose 1.3 per cent as Teck Cominco Ltd. (TSX: TCK-B.TO) climbed 79 cents to $51.

Elsewhere on the TSX, Rothmans Inc. (TSX: ROC.TO) moved up seven cents to $25.32 after an 18 per cent rise in full-year earnings to $117.6 million as net sales at subsidiary Rothmans, Benson & Hedges Inc. rose eight per cent to $670.6 million thanks to price increases.

On overseas stock markets, London's FTSE 100 index was up 85.4 points to 6,337.2, while Germany's DAX index advanced 116.78 to 7,197.83 and the Paris CAC 40 was up 45.66 at 5,103.17.

Tokyo's Nikkei index slipped 0.2 per cent to 14,219.48, after climbing more than four per cent in the previous four sessions.

Japan's economy grew at a stronger-than-expected annual rate of 3.3 per cent in the first quarter, its third consecutive quarter of growth.

But analysts warned that the world's second-largest economy is almost certain to slow in coming months, largely because of high oil and food prices, along with weakening corporate investment.

Hong Kong's Hang Seng index climbed 105.15 points or 0.4 per cent to 25,618.86, lifted by Wall Street's overnight strength and an analyst upgrade of Li Ka-shing's Cheung Kong property group.

In mainland China, shares slipped on profit-taking in electric utilities and steel companies which had run up earlier in the week on expectations of earthquake-augmented demand. The Shanghai composite dipped 0.4 per cent to 3,624.23.