Commodity stocks help lift TSX ahead of heavy slate of earnings; oil prices rise

By Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market racked up solid early gains Monday morning amid rising commodity prices and ahead of a busy earnings week in Canada and the U.S.

Mining, energy and tech stocks led advancers as the S&P/TSX composite index climbed 77.4 points to 11,459.5. The TSX lost just over one per cent last week, led by declines in the energy and financial sectors as investors took some profits. The main index is still close to its highs for the year and is up more than 50 per cent since the lows of early March.

"Any time you're flirting with the top, it's hard to push through," said David Hefty, CEO at Cornerstone Wealth Management in New York.

The Canadian dollar continued to back away after Bank of Canada governor Mark Carney reiterated late last week that the currency's recent sharp rise threatens to derail the economic recovery. And he made it clear that intervention in currency markets to control that surge is a possibility.

On Monday, Carney warned that governments won't allow the world's bankers to return to their irresponsible ways and added financiers had better get ready for major changes to the way they do business.

The loonie was down 0.44 cent to 94.63 cents US.

Oil prices held firm above the US$80 a barrel mark as the December crude contract on the New York Mercantile Exchange advanced 44 cents to US$80.94 a barrel. The energy sector was ahead almost one per cent and EnCana Corp. (TSX: ECA.TO) rose 75 cents to $63.85.

Other commodities edged higher as the December bullion contract on the Nymex gained 50 cents to US$1,056.90 an ounce, taking the gold sector up 0.66 per cent.

The base metals sector advanced while December copper was up three cents to US$3.07 a pound. Teck Resources (TSX: TCK-B.TO) climbed 58 cents to $35.39.

Tech stocks also attracted investors as Research In Motion Ltd. (TSX: RIM.TO) moved up 95 cents to $70.15.

The Toronto market is little changed since the beginning of the month even as the U.S. third quarter earnings season has seen many companies beat earnings expectations.

Now in the coming week investors will take in reports from Canadian market heavyweights including utility TransAlta Corp. (TSX: TA.TO), Canadian Pacific Railway (TSX: CP.TO), Imperial Oil (TSX: IMO.TO) and Nexen Inc. (TSX: NXY.TO).

The TSX Venture Exchange added 0.74 of a point to 1,334.65.

New York indexes were little changed as investors also await the U.S. government's first reading on the economy in the third quarter later in the week.

The Dow Jones industrial average was ahead 39.8 points to 10,012 after easing 24 points last week.

The Nasdaq composite index rose 13.9 points to 2,168.37 while the S&P 500 index was up 4.9 points to 1,084.5.

The U.S. Commerce Department's report on third-quarter gross domestic product, the broadest measure of the economy's health, is due out on Thursday. Economists predict the economy grew at an annual rate of 3.2 per cent in the quarter, according to Thomson Reuters. That would mark the first quarter of growth after four straight declines.

In other corporate news, The New York Times is reporting Rogers Communications (TSX: RCI-B.TO) has made a multimillion dollar investment to become a minority stakeholder in Vuguru, a web video studio being spun off by former Disney chairman Michael Eisner.

The studio is currently held within Eisner's private media investment company Tornante. The Times says it expects a formal announcement today. Rogers shares advanced 31 cents to $29.20.

CI Financial Corp. (TSX: CIX.TO) shares gained six cents to $19.75 as it announced it is selling investment dealer Blackmont Capital Inc. to Australian-based Macquarie Group. for $93.3 million.

CI Financial says it will keep Blackmont's capital markets division, which provides market research and producing analyst reports on stocks and other investments.

Blackmont operates a network of about 130 investment advisers who provide services to retail investors.

Jien Canada Mining Ltd. says it still holds the best offer to take over Canadian Royalties Inc. (TSX: CZZ.TO) in a $192-million proposed deal and urged securityholders Monday to tender securities before the Oct. 27 deadline. Jaguar Financial (TSX: JFC.TO) has said it will attempt to block the deal because debtholders would receive only 80 per cent of their principal back, not 101 per cent as required under the debt agreements. Canadian Royalties shares surged six cents to 72 cents.

Asian stocks closed higher as South Korea's central bank said economic growth accelerated to 2.9 per cent in the third quarter from the previous quarter - the fastest growth since the first quarter of 2002.

Asia's fourth largest economy has been bolstered by government stimulus spending, low interest rates, and a falling won which boosts exports. Massive stimulus spending also played a part in China's economic growth accelerating in the third quarter, according to official figures last week.

Japan's Nikkei 225 stock average rose 0.8 per cent, South Korea's Kospi advanced one per cent, Hong Kong's market was closed for a holiday and China's Shanghai benchmark gained 0.1 per cent.

London's FTSE 100 index inched up 0.2 per cent, Frankfurt's DAX gained 0.42 per cent while the Paris CAC 40 was ahead 0.27 per cent.