Commodities support TSX to slight rise amid worries about government debt levels
Canuck57
Nobody in their right mond owns bonds, GICs, CDs or loans money any
more. Not unless it comes with an inflation and interest clause and
some prety good locked up hard assets for collateral. Even then...
Governments are broke and the currency is about to break with a nasty
thing called inflation. Ontario recently had it's rating drop and even
Alberta had to re-open a bond offering.
--
Commodities support TSX to slight rise amid worries about government
debt levels
Wed Dec 9, 5:40 PM
Malcolm Morrison, The Canadian Press
TORONTO - The Toronto stock market closed little changed Wednesday,
weighed down by financials amid growing caution about the threat posed
by high government debt levels.
Enlarge Photo
(The Canadian Press)
By Malcolm Morrison, The Canadian Press
TORONTO - The Toronto stock market closed little changed Wednesday,
weighed down by financials amid growing caution about the threat posed
by high government debt levels.
The S&P/TSX composite index finished the day up 10.29 points at
11,379.22 as the market found support from higher mining stocks.
The Canadian dollar rose 0.84 of a cent to 94.83 cents US. The loonie
had fallen nearly a cent against the greenback on Tuesday.
Investor nervousness increased Wednesday after Standard & Poor's lowered
its outlook on Spain's debt rating to "negative" from "stable,"
reflecting "the risk of a downgrade within the next two years."
S&P had already cut Spain's rating from AAA to AA+ in January. On
Tuesday, rival Fitch had downgraded its rating on Greece.
Moody's also cut the ratings of six Dubai government-linked companies,
leaving all in junk status.
"When we get this continued bubbling situation in Dubai and the
downgrade of Greece's credit rating, we now realize that it's not
necessarily just the U.S. financial system or the European banking
financial system but sovereign wealth funds," said Kathryn Del Greco,
vice-president and investment adviser at TD Waterhouse private
investment advice.
"And these global economies really can remind us that things are not
solved yet and there still could be some fallout and some repercussions
of the excesses of the previous few years."
Wednesday's weak showing followed four days of TSX declines that carved
just over 400 points from the main index - a sign that investors are
hard pressed right now to find a reason to extend a rally that has gone
on practically non-stop since early March.
"I think this market needs to be fed good news to be able to get higher
than where it is right now - this market needs something fundamentally
surprising to take it to new levels," added Del Greco.
"I think the market is probably vulnerable to a correction. I know we
have been talking about it for several months now and it still has yet
to materialize, (but) the market feels tired."
Worries about foreign debt helped push the financial sector down 0.59
per cent as National Bank (TSX: NA.TO) shed $1.03 to $57.47 while
Manulife Financial (TSX: MFC.TO) lost 38 cents to $17.49.
Laurentian Bank (TSX: LB.TO) shares gained 35 cents to $42.45 after it
said its dividend will be increased by about six per cent following a
fourth quarter that included a mixed bag of increased revenue, higher
profit and larger provisions for loan losses.
The energy sector moved down 0.55 per cent as oil prices declined
despite data from the U.S. Department of Energy showing that crude
inventories fell 3.8 million barrels last week, against the
600,000-barrel rise that economists had expected. However, gasoline
supplied increased.
A rising U.S. dollar also helped pushed the January crude contract on
the New York Mercantile Exchange down $1.95 to US$70.67 a barrel. EnCana
Corp. (TSX: ECA.TO) rose 40 cents to $29.66 after it said it had
received TSX approval to buy and cancel up to 37.5 million of its common
shares, about five per cent of the total as of Nov. 30. But Suncor Inc.
(TSX: SU.TO) gave back 40 cents to $35.64.
The gold sector was the best performing sector, up 1.83 per cent even as
the February gold contract in New York moved down $22.50 to US$1,120.90
an ounce. Goldcorp Inc. (TSX: G.TO) improved 73 cents to $42.97.
The base metals sector was up 1.17 per cent as March copper dropped four
cents at US$3.12 a pound. Teck Resources (TSX: TCK-B.TO) gained $1.61 to
$36.45 while First Quantum Minerals Ltd. (TSX: FM.TO) shares fell $1.47
to $74.70 after it said Tuesday it has signed a deal with BHP Billiton
to buy the Ravensthorpe nickel operation in Australia for US$340
million. Ravensthorpe was completed in 2007, however operations were
suspended in January due to low nickel prices.
Research In Motion Ltd. (TSX: RIM.TO) continued to provide market
support, up $2.73 or 4.19 per cent to $67.82. The Blackberry maker's
stock has been rising since announcing a strategic partnership with
China Mobile earlier this week.
The TSX Venture Exchange gained 7.84 points to 1,410.08.
New York markets finished higher as U.S. Treasury Secretary Timothy
Geithner said that the government would extend its financial bailout
program until next fall.
Money from the $700-billion, taxpayer-funded bailout program has helped
rescue big Wall Street firms, auto companies and others.
The Dow Jones industrial average rose 51.08 points to 10,337.05.
The Nasdaq composite index moved 10.74 points higher to 2,183.73. The
S&P 500 index added four points to 1,095.94.
In other corporate news, Husky Energy Inc. (TSX: HSE.TO) said Tuesday
that it has hit natural gas with an exploration well in the South China
Sea. Its shares lost 43 cents to $26.81.
New Gold Inc. (TSX: NGD.TO) has failed to get a Mexican court to lift
the shutdown of its Cerro San Pedro gold mine while the Canadian company
appeals the suspension order. Mexico's environment ministry, acting on a
federal court ruling, revoked the mine's 2006 environmental permit in
mid-November. Is shares headed down six cents to $3.61.
Shares in Westport Innovations Inc. (TSX: WPT.TO) fell $1.37 to $11.08
after the maker of low-emission, alternative-fuel engines announced that
it will sell 4.75 million common shares at $10.50 a share for proceeds
of up to US$57.4 million.
Western Wind Energy Corp. shares (TSXV: WND.V) surged 32 cents or 21.77
per cent to $1.79 in heavy trading on the TSX Venture Exchange. The
company attributes investor interest to comments made by analysts and a
major American utility company's announced plan to purchase and complete
a California wind project.