The winning run on the Toronto stock market extended to six sessions Wednesday, thanks in part to a pair of positive U.S. economic reports.
The S&P/TSX composite index closed off the highs of the day, running ahead 49.12 points to 11,635.49 as declines in mining stocks eroded an early 111-point gain.
The Canadian dollar was off 0.15 of a cent at 95.68 cents US.
New York markets were also higher as the Dow Jones industrials advanced 40.43 points to 10,309.24, the Nasdaq composite index moved up 12.1 points to 2,226.29 while the S&P 500 index gained 4.64 points to 1,099.51.
Investors looking for further signs of an economic recovery were pleased by data showing that U.S. housing construction rose 2.8 per cent to a seasonally adjusted annual rate of 591,000 units. That was better than the 580,000 annual pace that economists had been forecasting.
Also, industrial production in the U.S. rose 0.9 per cent in January, an improvement from the 0.8 per cent reading that economists had expected.
There are definitely signs that the economy is recovering," said Kathryn Delgreco, vice-president and investment adviser at TD Waterhouse Private Investment Advice.
We think that it shows signs the U.S. housing market's recovery is firmly underway," Delgreco said, adding that the better-than-expected gain in industrial production was very encouraging to see."
The response to the economic data was muted at mid-afternoon after the U.S. Federal Reserve said it would take some time" for the economy and the jobs market to get back to normal.
Minutes from the most recent Fed meeting showed that a minority of its policy-makers think it could take more than five or six years for that to happen. Previously, Fed policy-makers had suggested economic conditions would return to full health within five or six years.
The financials sector led TSX advancers, up 1.24 per cent as CIBC (TSX:CM) moved ahead $1.06 to $66.77 and Manulife Financial climbed 36 cents to $19.50.
Canada's largest car and home insurer, Intact Financial Corp. (TSX:IFC), said it was raising quarterly dividends to shareholders by 6.25 per cent following a $96.7-million net profit in the fourth quarter. The profit was a big turnaround from the $64.1-million loss reported a year earlier by the Toronto-based insurance company formerly known as ING Canada. Its shares moved up $1.31 to $40.39.
The energy sector was flat as oil prices edged higher Wednesday after surging the previous day amid a weaker dollar, rising stock markets and expectations that a growing U.S. economy would fuel increased crude demand. The March crude contract on the New York Mercantile Exchange gained 32 cents to US$77.33 a barrel. Imperial Oil (TSX:IMO) headed up 34 cents at C$40.37.
The telecom sector was the biggest drag on the Toronto market as Rogers Communications Inc. (TSX:RCI.B) shares moved down $1.58 to C$32.94.
The slide happened even as the company announced an increase in its dividend and renewed a stock buyback program that will allow it to cancel up to $1.5 billion worth of its publicly traded B shares in the coming year. The company reported a $310-million net profit in the fourth quarter of 2009, as revenue rose four per cent from a year earlier to $3 billion.
I think they were just a little bit modest in their guidance going forward," added Delgreco.
If there is one thing people like to see is that things are getting much, much better and that there's a reason to feel optimistic. Maybe there was some disappointment that they weren't as bullish in their outlook as people wanted to hear."
The base metals sector was down 0.47 per cent as March copper was ahead two cents at US$3.24 a pound. Equinox Minerals (TSX:EQN) declined 12 cents to C$3.41 and FNX Mining (TSX:FNX) lost 19 cents to $12.61.
The April bullion contract on the Nymex moved 30 cents higher to US$1,120.10 an ounce and the gold sector lost 0.44 per cent. Barrick Gold Corp. (TSX:ABX) improved 62 cents to C$39.65.
Iamgold Corp. (TSX:IMG) shares faded 28 cents to $15.72 as the miner had a reduced fourth-quarter net loss of US$47.3 million, or 13 cents per share, less than half the year-earlier loss of US$96.4 million or 33 cents per share.
Grocer Loblaw Cos. Ltd. (TSX:L) said it earned $165 million or 60 cents per share in the fourth quarter. Canada's largest grocery company said its sales for the 12-week period fell 5.6 per cent to $7.3 billion. Its shares rose $1.08 to $38 amid a warning that the next couple of years could be tough.
WestJet Airlines Ltd. (TSX:WJA) said it experienced a big drop in fourth-quarter profitability and its CEO was cautious about reports of an economic recovery. Net income in the fourth quarter fell to $20.2 million or 14 cents per share, down 51.9 per cent from a year earlier. Revenue was down 7.4 per cent to $570 million but the carrier's shares rose 17 cents to $14.03.
The TSX Venture Exchange closed down 1.42 points to 1,518.72.
A strong earnings report from Deere and Co. also helped lift markets.
The heavy equipment maker reported a much better than expected fiscal first-quarter profit of US$243.2 million despite the stubbornly weak" economy and raised its full-year earnings outlook. Deere shares shot up $2.72 to US$56.50.
