TSX rises, led by gains in mining, energy; N.Y also up after industrial data

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(The Canadian Press)

By Malcolm Morrison, The Canadian Press

TORONTO - Mining stocks led the way to a positive open on the Toronto stock market Wednesday while data showed a sharp uptick in manufacturing sales during July.

The S&P/TSX composite index gained 65.7 points to 11,561.5 after rising 164 points on higher commodity prices and a declaration by Federal Reserve chairman Ben Bernanke that the U.S. recession was likely over.

The TSX has racked up four consecutive days of solid gains on hopes for a strong recovery and a positive third-quarter earnings season, leaving the market up 52 per cent since the lows of early March and up 28 per cent year to date.

The gold sector was up 1.64 per cent on Wednesday as a weaker U.S. dollar helped push the December bullion contract on the New York Mercantile Exchange up $14.40 to US$1,020.70 an ounce. Goldcorp Inc. (TSX: G.TO) climbed 57 cents to $46.01.

December copper ran up eight cents to US$2.92 a pound, helping take the base metals sector 1.23 per cent higher. HudBay Minerals (TSX: HBM.TO) added 11 cents to $8.86.

Energy stocks were positive in early trading as the October crude contract on the New York Mercantile Exchange shook off early losses to gain 29 cents to $71.22 a barrel after the American Petroleum Institute said Tuesday that U.S. oil inventories rose last week, more evidence demand remains tepid.

The Canadian dollar moved up 0.27 of a cent to 93.61 cents US, after rising more than a cent Tuesday amid yet another warning from the Bank of Canada that the strong loonie could derail a strong economic recovery.

Statistics Canada reported that manufacturing sales rose 5.5 per cent in July to $41.4 billion, adding to the 2.2 per cent increase reported in June, thanks to improved performances in the motor vehicle and primary metals industries.

Excluding the motor vehicle assembly and motor vehicle parts industries, manufacturing sales increased 2.1 per cent.

The TSX Venture Exchange climbed 12.72 points to 1,282.07.

New York markets continued to find lift from the Bernanke comment, even as the Fed chief added that the economy isn't likely to grow fast enough to lower unemployment any time soon.

The Dow Jones industrial average rose 29.4 points to 9,712.8 as investors took in data showing that consumer prices rose slightly in August due to higher gas prices, another sign the weak economy is keeping inflation in check.

The consumer price index rose 0.4 per cent in August, after a flat reading in July.

The Nasdaq composite index moved up 8.16 points to 2,110.8 while the S&P 500 index gained 3.55 points to 1,056.2.

While Bernanke indicated an end to the recession, investors are still looking for confirmation of renewed growth in the U.S. and other data showed U.S. industrial companies boosted production more than expected in August.

The Federal Reserve says output at U.S. factories, mines and utilities rose 0.8 per cent in August. Economists surveyed by Thomson Reuters expected a 0.6 per cent increase.

In corporate news, the Globe and Mail reported that Magna International Inc.'s (TSX: MG-A.TO) has been told by BMW, the auto parts giant's second-largest customer, that the close relationship between the two companies could be in jeopardy. It said that the German automaker fears Magna will go from parts supplier to competitor if the Canadian company fulfills its goal of leaping into the ranks of mass producers through an ownership stake in Adam Opel GmbH. Magna shares lost 53 cents to $46.48.

Adobe Systems Inc. said Tuesday it will buy web analytic software company Omniture Inc. for about US$1.8 billion, giving the maker of content-creation software a way to let marketers measure the effectiveness of such content. San Jose, Calif.-based Adobe, which makes Flash, Acrobat and Photoshop software, said it will buy Omniture for $21.50 per share in cash, a premium of 24 per cent to Omniture's closing stock price Tuesday.

Harry Winston Diamond Corp. (TSX: HW.TO) says a winter shutdown at the Diavik mine in Canada's North won't be necessary after all. The shutdown had been scheduled in response to the global economic recession that began about a year ago. Its shares rose 40 cents to $9.56.

Optimism about the U.S. economy helped drive Asian markets higher. Japan's benchmark Nikkei 225 index gained 0.5 per cent, with stocks helped by hopes the country's incoming government, set to be inaugurated later in the day, won't make big changes to economic policies.

Hong Kong's Hang Seng was up 2.6 per cent.

Only China's market, which is relatively closed to foreign investors and often moves out of step with global stocks, was lower. The Shanghai benchmark fell 1.1 per cent.

London's FTSE 100 index gained 1.6 per cent, Frankfurt's DAX advanced 1.1 per cent while the Paris CAC 40 was up 1.5 per cent.