Closing Bell: TSX claws way to second day of gains

Canadian stocks on Wednesday clawed their way to a second day of gains in the New Year, as rising U.S. auto and retail sales offset lower-than-expected factory orders and concerns over European bank financing.

Here are the closing numbers:

TSX — 12226.47 0.15% +18.04

S&P 500 — 1277.30 0.02% +0.24

Dow — 12418.42 0.17% +21.04

Nasdaq — 2648.36 -0.01% -0.36

The S&P/TSX composite index finished the session up 18.04 points, or 0.15%, to 12,226.47 after gaining more than 2% the day before.

“Even with some traders looking for any excuse to take some profits off the table, such as higher European bank borrowings with the ECB, ongoing financial problems in Hungary and U.S. factory orders that were a touch softer than expected, markets have remained above yesterday’s (Tuesday’s) breakout points,” said CMC Markets analyst Colin Cieszynski.

“This indicates strengthening support as buyers have been able to absorb everything that sellers could throw at them.”

Toronto’s materials sub-index edged up 0.12% as gold prices rose US$12.20 to US$1,612.70 an ounce, and despite the shares of index heavyweight Potash Corp. falling 84 cents, or 1.9%, to $43.42 after the potash producer was rated “underperform” by National Bank analyst Robert Winslow, who said global potash supply is likely to increase more than demand, hitting prices, according to a report from Reuters.

The energy sub-index edged up 0.38% as U.S. crude prices climbed 26 US cents to US$103.22 a barrel, as European Union governments reached a preliminary agreement on banning Iranian oil imports to protest its nuclear development program, raising fears Iran may block oil flow in the Strait of Hormuz.

Advancers led decliners on the TSX by 136 to 108, with nine issues unchanged.

The Canadian dollar was off 13 basis points to 98.78 US cents.

Markets were met in morning trading with data showing U.S. factory orders rose 1.8% in November — the most in four months — but failing to meet forecasts for a 2% gain.

The early tone of the trading session was also influenced by concern over European banks’ ability to meet capital requirements to weather the debt crisis after Italian bank UniCredit SpA sold a rights issue at a big discount to Tuesday’s closing price.

But the mood improved after reports from the Big Three U.S. auto makers showed them all posting double-digit sales gains in 2011.

As well, U.S. retail sales appeared strong in a report from the International Council of Shopping Centers, which said sales at stores open more than a year may have gained a better-than-expected 4.5% in December.

The Dow Jones industrial average rose 0.17%, or 21.04 points, to 12,418.42, while the Nasdaq composite index dipped 0.36 points, or 0.01%, to 2,648.36.

Canada’s Venture composite index ended up 9.61 points, or 0.64%, to 1,515.89.

European indexes closed down, with London’s FTSE off 0.55% to 5,668.45, the Paris CAC down 1.59% to 3,193.65 and Frankfurt’s DAX down 0.89% to 6,111.55.

Here’s the news investors were watching today:

U.S. factory orders rise, but business spending drops

Turn in inflation boosts ECB rate hike expectations




8:30 a.m.

  • Industrial Product and Raw Materials Price Indices (November)

10:00 a.m.

  • Ivey Purchasing Managers’ Index (December)


7:30 a.m.

  • Challenger Layoff Report (December)

8:30 a.m.

  • UI Claims (December 31)

10:00 a.m.

  • Non-manufacturing ISM Index (December)
  • 3-year note auction announcement
  • 10 % 30-year note auction (reopening) announcement
  • Chain-store sales (December)

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