U.S. earnings, gold fuel 155-point gain
Toronto’s main index soared more than 150 points on Tuesday, partly on the strength of gold as well as strong earnings from a number of American companies.
The S&P/TSX composite index advanced 155.73 points to 14,752.25, lifted by gold sector gains of more than three per cent. The December gold contract added US$6.30 to $1,262.90 per ounce.
Norman Levine, managing director at Portfolio Management Corp, said a jump in the price of gold could shift stock prices a little bit. But for the most part, he said, the S&P/TSX “is moving in tandem with the U.S. market,” which is seeing gains from a positive start to earnings season.
In New York, the Dow Jones industrial average gained 75.54 points to 18,161.94 and the S&P 500 rose 13.10 points to 2,139.60. The Nasdaq composite advanced 44.02 points to 5,243.84.
The early days of earnings season for American companies has seen positive results, and Netflix, UnitedHealth Group and Domino’s Pizza stocks all rose after each company reported a boost in profits.
“So far, nobody’s really messed up to any large degree,” said Levine. “So, people are feeling confident today.”
The loonie stayed relatively flat, rising 0.07 of a U.S. cent to 76.23 cents US ahead of today’s Bank of Canada rate announcement. The bank is expected to keep its key interest rate unchanged at 0.5 per cent.
“It won’t make a change for the foreseeable future,” said Levine. The exception would be if the U.S. Federal Reserve, which is expected to boost its rate for the first time in months this December, makes numerous moves, he said. “Then the Bank of Canada will respond to that,” said Levine.
However, he added, one rate hike by the Fed shouldn’t prompt Canada’s central bank into action, as the American economy is stronger and rate hikes signal an improved economy.
Still, a Statistics Canada report released Tuesday boosted expectations for a rebound in the economy in the third quarter. Manufacturing sales increased 0.9 per cent to $51.1 billion in August. Economists had expected a rise of 0.3 per cent, according to Thomson Reuters.
Elsewhere in commodities, the more heavily traded December crude contract gained 25 cents to US$50.62 per barrel, while the November crude contract gained 35 cents to US$50.29 per barrel.
November natural gas rose 1.9 cents to US$3.26 per mmBTU and December copper contracts were relatively unchanged at US$2.11 a pound.
PokerStars owner Amaya to stay independent
MONTREAL — Following the collapse of merger talks with a British betting company, Amaya Inc. said it’s pursing options for making a US$400-million deferred payment related to its purchase of the PokerStars online gambling business in 2014.
The Montreal-based company is due to make the payment on Feb. 1 as part of its acquisition of the Rational Group — and several gaming brands including PokerStars — for US$4.9-billion.
Amaya said Tuesday that it’s pursuing “various non-dilutive options” to supplement its cash resources, including excess cash flow from operations and about US$99 million of unrestricted cash on its balance sheet as of Sept. 30.
Earlier, British betting company William Hill PLC and Amaya announced they had called off merger talks that they disclosed earlier this month amid reports that a possible deal was in the works.