Stock markets gain on higher commodities, economic data and hope for Greece

The Canadian Press ~ The News
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TORONTO - The Toronto stock market closed sharply higher Tuesday, led by a solid showing in the commodities sector as the U.S. dollar weakened. Investors were also encouraged by economic data and hopes that Greece can get its financial problems under control.

The S&P/TSX composite index rose 116.56 points to 11,586.37, adding to last week's 2.2 per cent run-up amid a commitment by the European Union to stand beside Greece as the country deals with its debt crisis.

Investor worry further receded after European leaders on Monday gave Athens a one-month deadline to prove it can bring its ballooning deficit under control and assuage concerns that Greece's financial problems could undermine the euro.

The Canadian dollar moved 0.5 of a cent higher to 95.83 cents US.

The energy sector rose 2.19 per cent as the March crude contract on the New York Mercantile Exchange advanced $2.88 to US$77.01 a barrel. Suncor Energy (TSX:SU) was up 70 cents at C$31.55.

The Deep Panuke natural gas project off Nova Scotia likely won't be producing until the middle of 2011. A spokeswoman for Calgary-based EnCana Corp. (TSX:ECA) said that drilling work is continuing but a delay in construction of the production facility, being built in the Middle East, has thrown the project off schedule. EnCana shares gained $1 to $34.68.

The April bullion contract on the Nymex rose $29.80 to US$1,119.80 an ounce, taking the gold sector up 1.92 per cent. Kinross Gold Corp. (TSX:K) climbed 36 cents to C$19.66 and Goldcorp Inc. (TSX:G) was ahead 73 cents at $40.08 .

The base metals sector advanced 1.85 per cent as March copper in New York climbed 14 cents to US$3.22 a pound. Teck Resources (TSX:TCK.B) advanced $1.17 to C$39.04 while HudBay Minerals (TSX:HBM) rose 31 cents to $13.51.

The TSX financial sector ticked 0.7 per cent higher after Finance Minister Jim Flaherty announced tighter rules for homebuyers because of concern Canadians may be taking on too much debt. One change would see borrowers required to meet the standards for getting a five-year fixed mortgage even if they are just opting for a cheaper, variable-rate instrument.

"I think it's a very smart move," said Don Reed, president and CEO of Franklin Templeton Investments Corp.

"It really is what upset the whole U.S. housing market - the fact that people were buying adjustable-rate mortgages and they weren't on fixed-rate mortgages because they could get a better rate. I don't know if we're in a housing bubble. I don't think we are, but if we are, we've learned a lesson from what has happened in other markets."

Bank of Montreal (TSX:BMO) climbed 66 cents to $54.64.

The tech sector was the weakest component, down 1.2 per cent as Research In Motion Ltd. (TSX:RIM) declined $1.95 to $73.35 even as the company launched a new BlackBerry web browser.

The TSX Venture Exchange gained 21.39 points to 1,520.14.

In economic news, Canadian manufacturing sales rose 1.6 per cent in December to $43 billion. Statistics Canada said Tuesday that the gains were mostly concentrated in the transportation equipment industry.

New York markets also headed higher after a report on manufacturing in the New York area was stronger than expected. The Empire State manufacturing index rose to 24.91 this month, compared with a forecast of 18. The index was 15.92 last month.

The Dow Jones industrial average moved 169.67 points higher to 10,268.81.

The Nasdaq composite index climbed 30.66 points to 2,214.19 while the S&P 500 index was up 19.36 points to 1,094.87.

Meanwhile, a bold acquisition move by the largest U.S. mall owner raised hopes that businesses are feeling more confident about the economy.

Simon Property Group offered to acquire its ailing rival, General Growth Properties, for US$10 billion. General Growth, the No. 2 U.S. mall operator, filed for bankruptcy protection last year.

U.S. markets also found support from strong earnings news as Kraft Foods Inc. and Abercrombie & Fitch both reported fourth-quarter profit that topped analysts' expectations. Drugmaker Merck & Co. said its profit jumped because of its purchase of longtime partner Schering-Plough Corp.

Illinois-based fertilizer producer CF Industries Holdings Inc. (NYSE:CF) reported that it earned US$51.4 million in the fourth quarter, down from $190.1 million a year ago. CF's revenue was down 53 per cent to $506.7 million. Calgary-based rival Agrium Inc. (TSX:AGU) has made a $5.2-billion hostile bid for CF. The offer expires Feb. 22. In New York, CF shares rose $3.07 to US$103.57 , while Agrium shares were up $1.19 to C$68.79 on the TSX.

Norwegian fertilizer company Yara International ASA said Monday it has agreed to acquire U.S. competitor Terra Industries Inc. for US$4.1 billion. Last month, CF Industries dropped its hostile bid for Terra after a year-long effort.

In other corporate developments, Rogers Communications Inc. (TSX:RCI.B) said it plans to defend in court its Internet advertising claims of having the "fastest and most reliable" network in Atlantic Canada.

Regional telecom company Bell Aliant (TSX:BA.UN) is asking a New Brunswick court to stop Rogers from making the claims about its high-speed Internet service. Bell Aliant says the claims are misleading, describing its own broadband Internet service as the most advanced and the fastest. Rogers shares were down 38 cents to $34.52 while Bell Aliant units gained 25 cents to $25.70.

Organizations: TSX, S&P, EnCana Corp. European Union CF Industries Holdings Inc. New York Mercantile Exchange Suncor Energy Nymex Research In Motion Ltd. Kinross Gold Goldcorp Inc. Teck Resources HudBay Minerals Franklin Templeton Investments Corp. Rogers Communications Inc. Bell Aliant Bank of Montreal Agrium Inc. Statistics Canada Dow Jones industrial average Simon Property Group General Growth Properties Kraft Foods Inc. Abercrombie & Fitch Drugmaker Merck & Co. Schering-Plough NYSE Yara International ASA

Geographic location: U.S., Greece, TORONTO New York Athens Nova Scotia Middle East Empire Calgary Atlantic Canada New Brunswick

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