BAY STREET UP AS BANKS OFFSET RESOURCE SLIDE
and
both notched up gains of more than 2% while rose 1.9%.
Mario Richard, senior portfolio strategist at Sceptre Investment Counsel, said the banks’ gains may be due to Finance Minister Ralph Goodale’s decision on Monday to delay a longawaited policy paper on big financial sector mergers, pushing the issue back beyond the next election.
Mr. Richard also credited the banks’ rise to a decline in bond yields yesterday amid expectations of continued interest rate hikes by the U. S. Federal Reserve. The drop in yields makes banks, with their high yielding dividends, an attractive alternative.
In the materials group, which was down 0.7%, gold mining stocks retreated 1.8%.
Virtually all of Toronto’s major gold names closed lower, with Bema Gold Corp. ( BGO/TSX) leading the decline, down 23¢, or 6.8%, at $3.14.
Bema said it would give a notice of default to Placer Dome Toronto stocks ended higher for the second straight session yesterday, lifted as financial issues helped offset a pullback among resource stocks.
The Standard & Poor’s/TSX composite index closed up 61.70 points, or 0.6%, at 11,067.17. The index earlier touched a high of 11,089.61. The blue-chip S&P/TSX 60 index rose 5.08 points, or 0.8%, to 626.19.
Eight of the TSX’s 10 main subgroups ended higher, led by the financial services sector, which rose 1.8% on broad based strength in the banks.
Bank of Nova Scotia Toronto-Dominion Bank
Royal Bank of Canada Inc., Canada’s No. 2 gold producer, after Placer said it plans to shelve their joint Cerro Casale gold mining project in Chile because it is not financially viable at this time. Bema disagrees and wants Placer to give up its 51% interest in the project. U.S. blue-chip stocks edged higher yesterday in a modest relief rally after Federal Reserve chairman Alan Greenspan steered clear of talking directly about the interest-rate outlook, while tech shares fell after a Wall Street downgrade of semiconductor companies.
The Dow Jones industrial average gained 12.58 points, or 0.1%, to end at 10,456.21 and the S&P 500 edged up just 0.03 of a point, to finish at 1215.66. The Nasdaq composite index dipped 5.04 points, or 0.2%, to close at 2116.42.
Mr. Greenspan told an economics conference that asset prices “invariably” fall after long periods of high risk-taking in markets, and a flexible economy is better able to withstand the inevitable blow.
Boeing Co. shares climbed, adding to gains on the Dow. The stock has advanced more than 5% since the commercial jet maker reached a union pact over the weekend. Its stock (BA/NYSE)
rose nearly 3%, or US$1.88, to close at US$66.55.
J.P. Morgan cut its view of the semiconductor sector and lowered ratings on chip makers, including Cypress Semiconductor Corp. and Fairchild Semiconductor International Inc.
The Philadelphia Stock Exchange Semiconductor Index dropped 1.2%.