Toronto posts triple-digit gain with investors digesting U.S. data, new deals

Enlarge Photo
(The Canadian Press)

By David Friend, The Canadian Press

TORONTO - The Toronto stock market posted a triple-digit rise near midday Monday on data that appeared to bolster optimism that a U.S. economic recovery is indeed gathering speed, helped as well by the signing of two big deals by major Canadian companies.

The S&P/TSX composite index was up 100.11 points to 11,058.92, while the Canadian dollar headed 0.26 of a cent higher to 92.90 cents US.

In the U.S., the Institute for Supply Management said that its services index rose to 50.9 in September from 48.4 in August. Analysts polled by Thomson Reuters had expected a reading of 50, the dividing line between growth and contraction.

The improvement in the overall index was welcome but the prices-paid index fell to 48.8 from 63.1, which signals businesses have little power to raise prices as consumers struggle.

Meanwhile, Canadian Hydro Developers, Inc. (TSX: KHD.TO) said it has tentatively agreed to an improved takeover bid from TransAlta Corp. (TSX: TA.TO). The deal boosts the offer to $5.25 per share. The agreement helped boost the TSX utilities sector 0.3 per cent, as Canadian Hydro shares gained 21 cents to $5.22. TransAlta was down seven cents to $21.05.

Enbridge Inc. (TSX: ENB.TO) and several international partners, including Chevron USA Inc., announced their intention to build a US$250-million oil pipeline from a proposed deep-water development in the Gulf of Mexico off Louisiana's coast.

Enbridge shares were up 27 cents to $41.03.

The TSX energy sector moved ahead 1.1 per cent as the November crude contract on the New York Mercantile Exchange slipped $1.61 to US$68.34 a barrel.

Financials led the sector gains, up 1.5 per cent, as CIBC (TSX: CM.TO) rose $1.52 to $64.83.

On Wall Street, the Dow Jones industrial average rose 68 points to 9,555.

The Nasdaq composite index gained 19 points to 2,067 while the S&P 500 index lifted 10 points to 1,035.

In other corporate news, Hanwei Energy Services Corp. (TSX: HE.TO) shares dropped 14 per cent after the company said it will miss its revenue growth and profit targets for 2009. The company revised its outlook after some of its wind power equipment deliveries were rescheduled to next year. Company stock was off 15 cents to 89 cents.

Canadian life sciences company DiagnoCure Inc. (TSX: CUR.TO) says its Previstage test for colorectal cancer will be represented in the United Kingdom and Ireland by a new partner, Lab21 of Cambridge, England. Its shares rose nine cents to $1.30.

Ivanhoe Mines (TSX: IVN.TO), its strategic partner Rio Tinto PLC (NYSE: RTP) and the Mongolian government are set to finally resolve terms for the Oyu Tolgoi copper-gold project Tuesday, at a signing ceremony in the capital of Ulan Batar. Ivanhoe's shares climbed 57 cents to $14.20.

On Friday, Boralex Power Income Fund (TSX: BPT-UN.TO) said Friday it has signed a deal with AbitibiBowater for the temporary operation of the Dolbeau power station. Units were up eight cents to $3.93.

Overseas, Britain's FTSE 100 rose 0.5 per cent, Germany's DAX index gained 0.6 per cent, and France's CAC-40 was up 0.4 per cent. Japan's Nikkei stock average declined 0.5 per cent.