TSX surges more than 150 points on energy, golds; retail sales help boost NY

Enlarge Photo
(The Canadian Press)

By Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market surged to levels last seen during the autumn of 2007 Thursday afternoon as gold stocks responded to higher bullion prices and energy stocks continued to shoot up even as crude prices shifted down from record highs.

Lower oil also helped give New York markets some lift, as did word that retailing giant Wal-Mart Stores turned in better-than-expected sales last month.

Toronto's S&P/TSX composite index ran ahead 163.26 points to 14,534.79, leaving the main index under 100 points from surpassing its all time high of 14,625.76 from late last July, a level it came less than a point of hitting again at the end of October.

"It still seems to be the commodity story, isn't it?" said Ian Nakamoto, director of research at MacDougall, MacDougall and MacTier.

"You're looking what's charging ahead, it's the energy, the golds, the mines. I still view those as a play on the developing world as opposed to the developed world."

However, he cautioned investors it's still too early to sound the all clear just yet: "It's still very volatile - even though we're up, I don't call this euphoric."

The TSX Venture Exchange gained 27.89 points to 2,532.47 and the Canadian dollar moved down 0.95 cent to 98.35 cents US as the seasonally adjusted annual rate of housing starts dropped to 213,900 units in April from 243,000 in March.

Canada Mortgage and Housing Corp., attributed most of the decrease to a drop in multiple starts after near-record highs in March and February.

New York's Dow Jones industrials gained 45.92 points to 12,860.27, after another day of record high oil prices helped send the blue-chip index tumbling 206 points in the previous session.

The Nasdaq composite index rose 11.01 points to 2,449.5 while the S&P 500 index climbed four points to 1,396.57.

Wal-Mart reported same-store sales rose 3.2 per cent during April, easily beating Wall Street's 2.1 per cent growth forecast. The world's biggest retailer also said it expects May sales growth, excluding fuel, to be flat to up to two per cent and its shares gained 54 cents to US$57.37 in New York.

Meanwhile, Wal-Mart Canada said it plans to open or expand 25 to 27 stores during its financial year ending next January.

Costco Wholesale Corp. also did well last month as consumers - contending with rising gas prices, sagging home prices and job worries - flocked to discounters and wholesale clubs. But most mall-based apparel stores struggled.

In Canadian retail news, shares in Canadian Tire (TSX: CTC.TO) fell $1.92 to $64.08 even as the retailer posted first-quarter net earnings of $66.7 million, up 19.8 per cent from the year-earlier period's $55.7 million. However, same store sales were down four per cent.

There were also some downbeat results from Toyota Motor Corp.

The Japanese automaker said its January-March profit tumbled 28 per cent due to the rising yen and weak North American sales. Toyota also predicted its full-year sales and earnings will decline.

In Toronto, the energy sector was up two per cent as the June crude contract on the New York Mercantile Exchange shed 91 cents to US$122.62 a barrel. Petro-Canada (TSX: PCA.TO) added $1.19 to $55.62 and Suncor Energy (TSX: SU.TO) climbed $3.10 to $124.10.

Gold prices headed up with the June bullion contract in New York ahead $10.90 to US$882.10 an ounce on a weakening U.S. dollar, taking the TSX gold sector ahead 4.75 per cent. Barrick Gold Corp. (TSX: ABX.TO) was up $1.59 to $40.78 while Kinross Gold Corp. (TSX: K.TO) improved $79 to $20.07.

The financial sector was down about one per cent, largely due to the latest earnings report from Manulife Financial (TSX: MFC.TO). Its shares fell $1.75 to $37.12 after the company reported profit of $869 million, down from a year-ago $986 million as sliding equity markets took an estimated $265-million bite out of earnings.

Manulife's total revenue fell to $7.97 billion from a year-before $8.63 billion as premiums and deposits slid five per cent to $17.8 billion.

Elsewhere in the sector, Bank of Montreal (TSX: BMO.TO) was 76 cents lighter at $49.69.

Onex Corp. (TSX: OCX.TO) was off 20 cents to $32.42 as the international conglomerate booked a 13 per cent rise in first-quarter revenue to $6.23 billion but net earnings declined to $45 million. That compared with $149 million in the year-ago quarter which included $116 million from discontinued operations.

Air Canada (TSX: AC-A.TO) ascended five cents to $8.10 after a first-quarter net loss of $288 million, including a $125-million provision for cargo price-fixing investigations and $89 million in currency setbacks.

Biovail Corp. (TSX: BVF.TO) moved up 67 cents to $12.51 after the drug company unveiled a new strategic plan to focus on central nervous system disorders, close its Puerto Rico operations and sell non-core assets. Biovail also reported first-quarter profit moved down to $56.4 million from $93.8 million a year ago. Revenues dropped to $208.5 million, compared with $247 million a year before.

Mega Brands Inc. (TSX: MB.TO) suffered a US$9.6-million first-quarter loss as sales declined 12 per cent to US$79.1 million on lower shipments of movie-related licensed products and magnetic construction toys. Its shares dropped 13 cents to $3.63.

AbitibiBowater Inc. (TSX: ABH.TO) lost US$248 million in the first quarter on sales of $1.7 billion. The loss is not directly comparable with year-ago pre-merger results for Bowater Inc. and Abitibi-Consolidated Inc., and CEO David Paterson said the forest industry giant made "important progress." Its shares rose 69 cents to $10.19.

Irving Oil Ltd. and Alimentation Couche-Tard Inc. (TSX: ATD-B.TO) are expanding their partnership into Atlantic Canada and New England. The companies said Thursday the new arrangement covers 252 Irving Oil convenience-store sites which will be leased and operated by Couche-Tard. Alimentation shares climbed 63 cents to $15.44.

Yellow Pages Income Fund (TSX: YLO-UN.TO) units moved up 10 cents to $10.80 after it booked a five per cent increase in first-quarter earnings to $127 million as revenue rose eight per cent to $414.6 million.