Another day of surging commodity stocks, particularly in the energy sector on record high crude oil, sent the Toronto stock market to less than 20 points away from its all time record closing high.
Toronto’s S&P/TSX composite index ran ahead 236.46 points or 1.64 per cent to 14,607.99, close to the time high of 14,625.76 from late last July.
"It still seems to be the commodity story," said Ian Nakamoto, director of research at MacDougall, MacDougall and MacTier.
"You’re looking what’s charging ahead, it’s the energy, the golds, the mines. I still view those as a play on the developing world as opposed to the developed world."
However, he cautioned investors it’s still too early to sound the all clear just yet: "It’s still very volatile – even though we’re up, I don’t call this euphoric."
New York markets finished higher despite high oil prices while investors got some consolation from retailing giant Wal-Mart Stores, which turned in better-than-expected sales last month.
The TSX Venture Exchange gained 34.87 points to 2,539.45 and the Canadian dollar moved down 0.98 cent to 98.32 cents US as the seasonally adjusted annual rate of housing starts dropped to 213,900 units in April from 243,000 in March.
Canada Mortgage and Housing Corp., attributed most of the decrease to a drop in multiple starts after near-record highs in March and February.
New York’s Dow Jones industrials gained 52.43 points to 12,866.78.
The Nasdaq composite index rose 12.75 points to 2,451.24 while the S&P 500 index climbed 5.11 points to 1,397.68.
Wal-Mart reported same-store sales rose 3.2 per cent during April, easily beating Wall Street’s 2.1 per cent growth forecast. The world’s biggest retailer also said it expects May sales growth, excluding fuel, to be flat to up to two per cent and its shares gained 33 cents to US$57.16 in New York.
In Canadian retail news, shares in Canadian Tire (TSX: CTC) gained $1.77 to $78.07 as the retailer posted first-quarter net earnings of $66.7 million, up 19.8 per cent from the year-earlier period’s $55.7 million.
In Toronto, the energy sector was up almost three per cent as the June crude contract on the New York Mercantile Exchange added 16 cents to a record close of US$123.69 a barrel. EnCana Corp. (TSX: ECA) added $2.91 to $87.48 and Canadian Natural Resources (TSX: CNQ) climbed $4.19 to $96 after hitting an all time high of $96.29.
Gold prices headed up with the June bullion contract in New York ahead $10.90 to US$882.10 an ounce on a weakening U.S. dollar, taking the TSX gold sector ahead 5.6 per cent. Barrick Gold Corp. (TSX: ABX) was up $1.81 to $41.
The chief executive of Yamana Gold Inc.(TSX: YRI) says success at the El Penon mine in Chile and high gold prices will lead to stronger financial results in the coming months following a better-than-expected first quarter low fees payday loan. Its shares shot ahead $1.11 to $14.92.
The financial sector was down about 0.75 per cent, largely due to the latest earnings report from Manulife Financial (TSX: MFC). Its shares fell $1.97 to $36.90 after the company reported profit of $869 million, down from a year-ago $986 million as sliding equity markets took an estimated $265-million bite out of earnings.
Elsewhere in the sector, Bank of Montreal (TSX: BMO) was 76 cents lighter at $49.69.
Onex Corp. (TSX: OCX) was off eight cents to $32.54 as the international conglomerate booked a 13 per cent rise in first-quarter revenue to $6.23 billion but net earnings declined to $45 million. That compared with $149 million in the year-ago quarter which included $116 million from discontinued operations.
Telus Corp. (TSX: T) shares rose $1.80 to $47.40 after it reported a 49 per cent increase in first-quarter net income to $291 million as revenue grew 6.6 per cent over a year earlier to $2.35 billion.
Air Canada (TSX: AC.A) climbed 15 cents to $8.20 after a first-quarter net loss of $288 million, including a $125-million provision for cargo price-fixing investigations and $89 million in currency setbacks.
Biovail Corp. (TSX: BVF) moved up 68 cents to $12.52 after the drug company unveiled a new strategic plan to focus on central nervous system disorders, close its Puerto Rico operations and sell non-core assets. Biovail also reported first-quarter profit moved down to $56.4 million from $93.8 million a year ago. Revenues dropped to $208.5 million, compared with $247 million a year before.
Timminco Ltd. (TSX: TIM) said Thursday that it has signed a second deal to supply solar grade silicon to Solar Power Industries Inc.
The deal came as Timminco, confronting skepticism about its solar-cell-grade silicon production process, said that a consultant has confirmed its validity and its shares were up $1.15 to $24.85.
Irving Oil Ltd. and Alimentation Couche-Tard Inc. (TSX: ATD.B) are expanding their partnership into Atlantic Canada and New England. The companies said Thursday the new arrangement covers 252 Irving Oil convenience-store sites which will be leased and operated by Couche-Tard. Alimentation shares climbed 59 cents to $15.40.
On the TSX, advances beat declines 1,041 to 566 with 216 unchanged as 502.8 million shares traded worth $8.8 billion.
As the fight for votes intensifies, a new poll finds that more Americans say they’ll be swayed by the candidate who can fix the economy and tame inflation, especially at the gas pump.
A national CNN/Opinion Research Corp. poll released Friday found that 49% of respondents think the economy is now the most important factor in deciding how they will vote in the upcoming presidential election. That’s up from 44% in February and 29% in December.
The economy was by far respondents’ largest concern. Of the more than 1,000 American adults surveyed in the poll, conducted April 28-30, only 19% said the Iraq war was the most important factor, and 14% said health care was most crucial.
Inflation worries grow: Nearly half - 47% - of respondents said the most worrisome economic problem is inflation, more than doubling the number who said the housing crisis was the top concern. Only 19% said the housing was their biggest economic concern, and 13% said it was unemployment that worried them the most.
"It’s not surprising consumers are expressing concern, because energy prices have risen quite a bit," said Wachovia economist Mark Vitner. "Just look at how much consumers are spending on necessities."
Americans are dishing out a record 57% of their spending on necessities like food, housing, energy, health care, according to Vitner, leaving only 43% of their remaining spending money on other purchases.
And when it comes to rising prices, soaring energy prices worried Americans the most, with 68% saying it was their top concern. Twenty-three percent said the escalation in food costs was their biggest worry.
That’s because food and energy prices are spiking payday advances.
According to a Commerce Department report released Thursday, inflation energy prices have risen 17% since March of 2008, and food prices are up 4.5%. Americans are experiencing pain at the pump, with gas prices reaching record levels. And shoppers have noticed a increase in food prices as well, especially in traded commodities like corn and soybeans.
Many economists blame the Federal Reserve’s months-long rate-cutting campaign for prices spiraling out of control. The central bank cut its key funds rate from to 2% in April from 5.25% in September in an attempt to boost the economy and stave off a recession.
But the cuts are also inflationary, leading investors to pour money into commodity futures as a hedge against the falling dollar.
As a result, many economists believe the Fed signaled an end to the rate cuts for the time being in an effort to stem the tide of inflation. But that doesn’t mean that prices will about-face overnight.
Good news for McCain? The presidential race is still wide open, with no overwhelming front-runner for the Democratic ticket.
But rising inflation could be good news for the presumed Republican nominee John McCain.
"Historically, when consumers are concerned about inflation, they vote Republican, and when they are worried about employment, that’s when they tend to vote Democratic." said Vitner. "But who knows: there are a lot of people are critical of Fed, and the Bush administration, so that may not hold true this year."
Federal prosecutors in New York have formed a task force together with other government agencies to examine the collapse of the market for risky home loans, a spokesman for the U.S. Attorney’s Office in Brooklyn said on Monday.
The group is being run out of the federal prosecutors’ office in Brooklyn, said Robert Nardoza, a spokesman for the office, formally known as the U.S. Attorney’s Office for the Eastern District of New York.
The task force is working with representatives from the Federal Bureau of Investigation, the U.S. Postal Inspection Service, the U.S. Secret Service, the Federal Deposit Insurance Corp and the U.S. Securities and Exchange Commission, Nardoza said.
He said the task force is focusing on mortgage activity in the New York area, where many financial services firms are located or do business.
It is working with representatives from the New York State Banking Department, New York City’s Department of Investigation and the Office of the New York State Attorney General.
“A lot of the districts in the country are taking similar action,” he said http://paydayloans-on.com. This task force was formed “to focus on the problem in our district,” which includes the New York City boroughs of Brooklyn, Queens and Staten Island, as well as Long Island.
The task force is being led by Assistant U.S. Attorney Jonathan Green in Brooklyn and had its first meeting last week, the spokesman said.
News of the task force was first reported in Monday’s editions of The Wall Street Journal.
Chevron Corp (CVX.N: Quote, Profile, Research), the second-largest U.S. oil company, said on Friday its first-quarter earnings rose 10 percent as record oil prices outweighed weak profits from gasoline production.
Oil prices have soared more than five-fold since 2002 on surging demand from emerging economies, supply concerns and the weak dollar. They broke $100 a barrel for the first time during the first quarter and hit a record of nearly $120 earlier this week.
Chevron’s largest peers, Exxon Mobil Corp (XOM.N: Quote, Profile, Research), Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research) and BP Plc (BP.L: Quote, Profile, Research), all posted sizable gains in the quarter, although Exxon’s results disappointed on weak oil and natural gas production.
Chevron’s net income in the quarter rose to $5.17 billion, or $2.48 a share, from $4.72 billion, or $2.18 a share, a year before online payday loan. Analysts, on average, had expected the company to earn $2.41, according to Reuters Estimates.
Last year’s results included a one-time $700 million gain from the sale of refining assets in the Netherlands.
Sales and other revenue in the quarter rose 40 percent to $64.67 billion.
Benchmark U.S. oil prices averaged a record of nearly $98 a barrel during the quarter, up nearly 70 percent from a year earlier.
But margins to produce gasoline have plummeted, with refiners struggling to push through higher crude costs to customers. First-quarter gasoline prices rose only 33 percent year over year in the U.S. — less than half crude’s rise.
Investors fear that Citigroup Inc’s (C.N: Quote, Profile, Research) sale of $4.5 billion of shares, combined with a $6 billion preferred stock sale last week, signal the bank is likely to face more write-downs in the future and may need to raise even more capital.
Citigroup management has shifted from believing it was essentially done raising new capital to signaling it is interested in raising more, analysts say.
That willingness to raise more money is a warning sign to some investors, because companies are typically reluctant to issue equity capital, which can be dilutive and boost dividend obligations.
“It looks like they’re trying to stop the bleeding and they just can’t seem to do it,” said Ralph Cole, portfolio manager at Ferguson Wellman Capital Management in Portland, Oregon.
Mike Hanretta, a spokesman for Citigroup said: “we are strongly capitalized.”
But some analysts disagree fast cash payday loan. Meredith Whitney, analyst at Oppenheimer & Co, said the bank needs another $10 billion to $15 billion of capital. Her note came out before Citi’s stock deal was boosted from $3 billion to $4.5 billion.
Whitney also believes Citi may cut its dividend, which costs the bank about $6.5 billion a year, for the second time this year.
The recent bout of preferred and common equity offerings — one of a series by capital-starved financial institutions worldwide — leave Citi with a Tier 1 capital ratio of about 8.6 percent, based on March 31 balance sheet figures. That beats the 7.7 percent level it had before the capital raising, and is above the bank’s target of 7.5 percent.
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