Big gains from EnCana, RIM push TSX towards record close;NY also rises

By Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market was headed to a new record high close Monday afternoon, largely because of news from market heavyweights EnCana Corp. (TSX: ECA.TO) and Research In Motion Ltd. (TSX: RIM.TO).

New York markets were up slightly as a rising dollar cooled some concerns about inflation and helped keep oil prices in check. Toronto's S&P/TSX composite index surged 152.12 points to 14,673.31, running past the record of 14,625.76 set last July 19.

The TSX is up almost six per cent so far this year, largely because of record high oil prices, along with higher prices for base metals.

In contrast, the financial sector has been a poor performer for most of the year because of concern over billions of dollars of writedowns in U.S.-mortgage related securities by global banks.

It is that narrow support for this particular rally that has some analysts concerned over whether the TSX can expand from this level.

"You have to be diversified, you have to own utilities, you have to own banks and all these other things - you just can't put all your money on black and hope that commodities go up forever," observed Bill Harris at Avenue Investment Management.

"It's a really narrow index and I love those stats saying if you strip out EnCana and Potash and stuff like that, the index hasn't gone anywhere. Which is correct, you still have to own those kind of companies but what's your proportion?"

EnCana Corp. shares were off earlier highs but still ahead $6 to $92.52 following Sunday's announcement that it will split into two companies, one focused on the oilsands and another, expected to keep the EnCana name, concentrating on natural gas.

Research In Motion (TSX: RIM.TO) shares ran ahead $8.29 to $141.64 as it advanced its position in the smartphone market with its new BlackBerry Bold product, providing wider functions and ease of use to fight off Apple's iPhone and other competitors. The new device will be available this summer.

RIM and Microsoft Corp. also announced an agreement to provide Microsoft Windows Live services on BlackBerrys, and RIM joined with Thomson Reuters (TSX: TRI.TO) and Royal Bank (TSX: RY.TO) in a venture to fund BlackBerry software development.

The TSX Venture Exchange was ahead 5.08 points to 2,569.09. The Canadian dollar was up 0.18 cent at 99.62 cents US.

New York's Dow Jones industrial average was up 103.32 points to 12,849.2.

The Nasdaq composite index gained 31.88 points to 2,477.4 and the S&P 500 index was ahead 10.31 points to 1,398.59 after FedEx Corp. late Friday lowered its fiscal fourth-quarter earnings forecast, citing rising fuel costs. Its shares were down 25 cents to US$90.12.

MBIA on Monday posted a US$2.41-billion first-quarter loss, as the struggling bond insurer took heavy charges amid continued deterioration in the credit markets and its shares rose 80 cents to US$10.23.

First-quarter losses at wireless carrier Sprint Nextel more than doubled to US$505 million, as it lost more than one million monthly subscribers but its shares headed up 25 cents to US$9.63.

The TSX energy sector gained 2.3 per cent in the wake of the EnCana announcement while oil prices bounced off early losses. The June crude oil contract on the New York Mercantile Exchange slipped $1.18 to US$124.78 a barrel, after going as low as US$123.86 as the U.S. dollar strengthened against the euro and yen.

Canadian Natural Resources (TSX: CNQ.TO) moved ahead $2.68 to $96.83.

Ivanhoe Energy Inc.'s (TSX: IE.TO) first-quarter net loss widened to US$8.5 million from a year-ago $6.5 million, but the company said preparations for commercial deployment of its heavy oil upgrading technology accelerated. Its shares were down three cents to $2.10.

Compton Petroleum Corp.'s (TSX: CMT.TO) first-quarter profit plunged to $1.6 million from $13.7 million on big foreign exchange loss. Revenue moved down 15 per cent to $162.4 million and its shares were down 16 cents to $12.04.

Gold prices were slightly lower and the June bullion contract in New York eased 90 cents to US$884.90 an ounce and the TSX gold sector moved down 0.24 per cent. Barrick Gold (TSX: ABX.TO) faded 38 cents to $39.13.

The financial sector also improved by the afternoon, rising 0.5 per cent as Scotiabank (TSX;BNS) rose 45 cents to $48.49 and National Bank (TSX: NA.TO) moved up 41 cents to $52.42.

Home Capital Group Inc. (TSX: HCG.TO) said strong earnings in its mortgage and credit-card lending business led to a 19 per cent rise in first-quarter profit to $25.2 million and its shares climbed $1.60 to $39.90.

WestJet (TSX: WJA.TO) is following Air Canada and various American carriers in adding fuel surcharges. WestJet said its charges will boost ticket prices by between $20 and $45, amid "unrelenting and unprecedented increases in the cost of fuel over the last year." The carrier's shares were off three cents to $16.27.

Shares in miner Crystallex International (TSX: KRY.TO) shot up 31 cents or 51.6 per cent to 91 cents. Its shares have been battered since April 30 when it said it had been denied a permit for exploration work at its key Las Cristinas project in Venezuela.

Shares in Anglo Potash Ltd. (TSXV: AGP.V) jumped $1.97 to $8.04 on the Venture Exchange after it agreed to be taken over by BHP Billiton Diamonds Inc. in a deal that values the Saskatchewan-focused exploration and development company at $284 million.