rising oil prices boost energy stocks

The Toronto stock market shook off a bout of morning weakness to move modestly higher Tuesday afternoon as rising oil prices boosted energy stocks.

The S&P/TSX composite index gained 50.01 points to 11,571.19.

Traders got over initial disappointment stemming from a failure by U.S. Federal Reserve chairman Ben Bernanke to reassure traders that more stimulus is coming to support a weakening economy.

Investors also took in a signal that the Bank of Canada is still leaning towards raising interest rates eventually, although it said the economic outlook is slightly weaker than in its previous forecast.

The Canadian dollar shook off early weakness to move up US0.20¢ to US98.76¢ after the Bank of Canada said it was keeping its key rate unchanged at 1%, reflecting a general slowing in global economic conditions.

The TSX Venture Exchange gave back 6.60 points to 1,176.75.

U.S. indexes had initially reacted negatively after Mr. Bernanke told the Senate Banking Committee the Fed is prepared to take further action, but didn’t spell out how or when. Mr. Bernanke also said that economic uncertainty is increasing, aggravated by the European debt crisis and the so-called fiscal cliff — where a variety of tax cuts expire and spending cuts take effect at the end of the year unless politicians can agree on alternatives.

The Dow Jones industrials finished well into positive territory, jumping 78.33 points to 12,805.54 as traders moved their focus to strong earnings reports and data showing a rise in industrial production. The Federal Reserve said factory output rose 0.7% last month, after falling by the same amount in May.

The Nasdaq composite index was up 13.10 points to 2,910.04 and the S&P 500 index climbed 10.03 points to 1,363.67.

New York bank Goldman Sachs says its net income fell 11% to US$962 million or US$1.78 a share in the April-to-June period after the investment bank’s clients traded less and made fewer deals as global financial markets turned volatile. Revenue also beat forecasts, even as it declined 9% to US$6.63 billion and its shares climbed US30¢ to US$97.98.

The TSX energy sector was the leading advancer, up 1.35% with the August crude contract on the New York Mercantile Exchange ahead US79¢ to US$89.22 a barrel.

Canadian Natural Resources improved by 83¢ to $27.31. The base metals sector was down 0.63% as copper gave up early gains to decline US3¢ to US$3.46 a pound.

The gold sector was down about 1.3% as bullion declined US$2.10 to US$1,589.50 an ounce.