Energy, mining stocks send TSX surging 150 points;NY weak despite HP earns

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(The Canadian Press)

By Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market surged about 150 points in early trading Wednesday in a broad-based advance led by energy stocks as oil prices moved higher for a second day, raising hopes that crude prices and oil stocks have stabilized.

Higher oil muted New York market gains but techs were stronger in the wake of a well-received earnings report from Hewlett Packard.

Toronto's S&P/TSX composite index moved up 149.99 points to 13,213.84 after lower financials pushed the index down 56 points on Tuesday.

The TSX Venture Exchange gained 14.58 points to 1,916.31 while the Canadian dollar was unchanged at 94.25 cents US as Statistics Canada reported that June retail sales met expectations, rising 0.5 per cent on the month.

However, analysts pointed out that all of the strength was attributable to higher prices, particularly for gasoline.

The volume of retail sales actually fell 0.4 per cent in June, with much of the weakness concentrated in the auto sector.

The agency also announced that the leading indicator, a forecast of economic activity, was unchanged for a second straight month in July.

It said that declines in housing and the average work week in manufacturing were large enough to offset small increases in the seven components that rose.

New York's Dow Jones industrial average inched up 4.88 points to 11,353.43 as worries about the health of U.S. financial institutions took the blue chip index down 131 points..

The Nasdaq composite index was the biggest U.S. gainer, up 8.03 points to 2,392.39 after Hewlett-Packard said its third-quarter profit jumped 14 per cent to US$2.03 billion and delivered a fourth-quarter outlook that was slightly better than analysts expected. Its shares ran ahead $1.84 to $45.53.

The S&P 500 index moved up 1.19 points to 1,267.88.

Investors also took in another reminder of the depth of the U.S. housing sector collapse as the Mortgage Bankers Association said that mortgage application volume fell last week to its lowest levels in nearly eight years.

A sharp drop in refinance volume in recent weeks has been the leading driver of declining application volume.

Oil prices were on the upswing shortly before the mid-morning release of U.S. energy inventory data.

The petroleum supply report was expected to show that gasoline inventories fell by three million barrels, along with a rise of 1.7 million barrels of oil while distillates are believed to have risen by 1.2 million barrels last week.

The September crude contract on the New York Mercantile Exchange rose $1.62 to US$116.15 a barrel, still down sharply from the July 11 record high of just over US$147.

The energy sector moved up 2.2 per cent with EnCana Corp. (TSX: ECA.TO) up $1.37 to $73.64.

Petro-Canada (TSX: PCA.TO) says the company is carefully monitoring a fire at a major oil-storage facility in Libya.

The fire is at a storage tank that's fed by fields operated by Petro-Canada and other oil producers.

Petro-Canada is currently using alternative storage capacity to handle the oil it produces in Libya and the impact on the company's operations has been minimal and its shares rose 86 cents to $46.03.

The base metals sector moved up two per cent with Teck Cominco Ltd. (TSX: TCK-B.TO) up $1.83 to $42.13.

Consumer discretionary stocks were weak as home improvement chain Rona (TSX: RON.TO) gave back 14 cents to $12.80.

In corporate news, Open Text Corp. (TSX: OTC.TO) shares climbed 72 cents to $37.08 after the Ottawa business software firm reported a sharp increase in quarterly profit to US$27.3 million compared with a year ago. Revenue increased nearly 15 per cent.

Shares in Maple Leaf Foods (TSX: MFI.TO) declined nine cents to $10.61 after the company said it is expanding a recall of its packaged meats and temporarily closing a Toronto plant that prepares the products. A number of the affected products are part of a listeriosis outbreak investigation.

Global steel maker ArcelorMittal is teaming with a small Canadian company to develop a US$250-million iron ore port in Brazil. The port will be built on lands in the state of Rio de Janeiro that were acquired by Vancouver-headquartered Adriana Resources Inc. (TSXV: ADI.V) in January.

ArcelorMittal will acquire 80 per cent ownership of the lands and buy 20 per cent of Adriana for a total of about $65.5 million. Adriana shares soared 28 cents or 39 per cent to $1.

Most Asian stock markets rebounded on speculation that Beijing was planning new measures to boost the country's languishing markets.

China's Shanghai Composite Index soared 7.6 per cent to 2,523.28.

Hong Kong's Hang Seng Index gained 2.2 per cent to 20,931.26.

However, Japan's Nikkei 225 was virtually flat, losing 0.1 per cent to 12,851.69.

London's FTSE 100 rose 20.8 points to 5,341.2, Frankfurt's DAX 30 added 3.29 points to 6,285.72 while the Paris CAC 40 gained 18.51 points to 4,351.3.