TSX back to breakeven

Toronto stocks closed in on Monday's final numbers as gold stocks strengthened on the back of record bullion prices, offsetting weakness in the energy sector. The market is attempting to move off of a two-month low.

As midday approached, the S&P/TSX composite index was off but 4.92 points to 10,873.43.

Gold stocks have surged and materials are up as the precious metal has surged more than $25 an ounce to a record high. New Gold has added 6.25%, Barrick Gold is up 6% and Goldcorp has gained 5.6%.

Iamgold Corp. has surged 9.3% after the company said it secured an approval to proceed with the $9 million deep sulphide feasibility Study from the Societe D'Exploitation Des Mines D'Or De Sadiola, the owner of the Sadiola Gold Mine in Mali, West Africa.

Kinross Gold has lost 1% after the company posted a net loss of $21.5 million U.S. or $0.03 U.S. per share for the third quarter, compared to net earnings of $64.7 million U.S. or $0.10 U.S. per share in the prior-year quarter.

Industrials are up amid word Warren Buffett's Berkshire Hathaway has agreed to acquire Burlington Northern Santa Fe (BNI) for $100 U.S. per share in cash and stock.

Canadian Pacific has rallied 3.4%, Bombardier has gained 3.2% and Canadian National Railway is up 2.5%.

Energy stocks are down, as Talisman Energy has slipped 1.6% after the company reported third quarter net income of $30 million or $0.03 per share, compared to $1.43 billion or $1.38 per share last year.

Precision Drilling has added 1.6% after the stock was initiated at “outperform” by RBC Capital Markets

In other corporate news, MDS has dropped 1.5% after the company along with Danaher Corp. have each received a second request for information from the Federal Trade Commission regarding the sale of MDS Analytical Technologies.

The Canadian dollar gained 0.60 cents to 93.35 cents U.S.

ON BAYSTREET

Of the 14 TSX subgroups, eight were lower, weighed mostly by global base metals, off 1.1%, metals and mining stocks, off 0.9% and energy, 0.7% lower.

The half-dozen gainers were lifted by gold stocks, up 4.4%, materials, surging 2.2% and industrials, ahead 1.4%.

The TSX Venture Exchange regained 15.89 points to 1,305.51, while the Nasdaq Canada index headed upwards 17.42 points to 627.49.

ON WALLSTREET

In New York, stocks tumbled Tuesday as a rising dollar pressured commodity shares and weakness in global markets rattled U.S. investors. The Federal Reserve's two-day policy meeting was also in focus.

The Dow Jones Industrials fell back 80.03 points to start the day at 9.709.41. The S&P 500 index faded 7.53 points to 1,035.35. The Nasdaq composite index backpedaled 16.31 points to 2,032.89.

MasterCard's forecast and UBS's quarterly results were among the factors dragging on the financial sector. Intel and other chipmakers slipped after Morgan Stanley cut its rating on the sector, according to reports.

But the Dow Jones Transportation average surged 4.4% after Warren Buffett's Berkshire Hathaway said it will buy railroad operator Burlington Northern Santa Fe. Burlington shares surged 28%.

In other merger news, Stanley Works said late Monday that it would buy Black & Decker in a $4.5 billion U.S. all-stock deal. Stanley Works shares gained 6% and Black & Decker gained 10%.

Stocks managed gains Monday after Ford Motor 's big quarterly profit and better-than-expected reports on housing and manufacturing. But the session was choppy as investors continued to worry that the massive 2009 rally has outpaced the still-germinating recovery. Such worries send the S&P 500 down 5% between the rally high of Oct. 19 and last Friday.

The S&P 500 had gained 63% between the 12-year low it hit on March 9 and the rally high on Oct. 19, as investors went from baking in a depression to a recession to an eventual recovery.

Trillions in fiscal and monetary stimulus fueled the run.

MasterCard reported higher-than-expected quarterly earnings, reversing a year-ago loss. The credit card processor also reported a higher quarterly revenue that topped estimates.

Looking forward, MasterCard said that fiscal-year 2009, 2010 and 2011 revenue growth will come in shy of the long-term objective of 12% to 15%. That sent shares lower Tuesday morning.

Swiss bank UBS reported a bigger quarterly loss that was worse than expected Tuesday and also issued a cautious outlook. Shares fell 5%.

Royal Bank of Scotland Group said it will sell its insurance unit and some branches as it receives an additional £25.5 billion pounds, or $41.6 billion U.S., in aid from the U.K. Treasury.

RBS shares fell 5%. Lloyds Banking Group will also receive over $9 million U.S. in aid.

Dow component Johnson & Johnson said it is cutting 7% of its global workforce as part of a cost-cutting plan that could save the company up to $1.7 billion U.S. by 2011. Shares were barely changed.

The central bank's two-day policy meeting got underway Tuesday, with a statement due Wednesday afternoon.

The Fed is widely expected to hold the fed funds rate, a key bank lending rate, at historic lows near zero. As always, investors will be attuned to what the Fed says about the economic outlook in its statement.

The Fed could also provide hints as to when it might start withdrawing some of the trillions in stimulus it put into the system over the last year to temper the impact of the financial crisis.

The bank is not expected to boost interest rates until some time next year.

Treasury prices lost ground, raising the yields for the benchmark 10-year note to 3.45% from Monday's 3.43%. Prices and yields move in opposite directions.

The price of a barrel of oil was flat at $78.05 U.S.

Gold prices gained $25 to $1,079 U.S. an ounce.