Business torrents

Stock markets moved higher today as investors seized on comments from ratings agency Standard and Poor's that the end could be in sight to the long string of billions of dollars worth of writedowns of securities linked to the collapsing U.S. housing sector.

S&P said "the positive news is that, in our opinion, the global financial sector appears to have already disclosed the majority of valuation writedowns."

That comment was good enough to reverse steep losses on stock markets during the morning arising from worries about the probable demise of an investment fund, sharply higher oil prices and a dismal reading on American consumer spending last month

Toronto's S&P/TSX composite index 146.15 points higher to 13,443.5, after earlier falling as much as 174 points.

Although financial stocks ended the day in the red, the TSX found support from energy and precious metal stocks as crude and gold bullion climbed further into record territory on further weakening of the U.S. currency.

Gold crossed the US$1,000-an-ounce mark for the first time.

The TSX Venture Exchange rose 7.45 points to 2,680.67 and the Canadian dollar moved up 0.47 cent to 101.46 cents US.

Statistics Canada reported that industries operated at 81.8 per cent of their capacity in the fourth quarter, down from 83.4 per cent in the third quarter and well below the most recent high of 87.1 in the fourth quarter of 2000.

The agency said the manufacturing sector, hard hit by the appreciation of the Canadian dollar, was a major factor in the decline.

New York's Dow Jones industrials came back from a drop of about 200 points to move 35.5 points higher to 12,145.74.

The Nasdaq composite index was up 19.74 points to 2,263.61 and the S&P 500 index added 6.71 points to 1,315.48.

However, S&P's bullish comments were at odds with others who maintained the credit crisis won't be over any time soon.

Bank of Canada governor Mark Carney said Thursday that although the first phase of the credit crunch is over, "the end is not in sight", a sentiment echoed by analysts on Bay Street.

"This is going to require a lot of patience on the part of investors because any near term resolution to what we have seen since last July is just not in the cards," said Gareth Watson, associate director and Canadian equity adviser at Scotia McLeod.

Financial stocks were rocked after Carlyle Capital Corp. said it expects creditors to seize all of the fund's remaining assets after unsuccessful negotiations to prevent its liquidation.

More than US$5 billion of Carlyle's securities have already been sold, but the fund tried to negotiate with the banks to prevent the liquidation of the remaining $16 billion.

Such a selloff raises fears that billions of dollars of depressed mortgage-backed securities will flood the market, reducing their value even further.

The TSX financial sector closed well off early lows but still down 0.23 per cent with National Bank (TSX: NA) down 96 cents to $47.64 but Scotiabank (TSX: BNS) moved up 28 cents to $45.64.

The Toronto gold sector was a main source of support, up 3.33 per cent per cent as the April bullion contract on the New York Mercantile Exchange closed up $13.30 to US$993.80 after going as high as US$1,001.50 fast cash advance. Barrick Gold Corp. (TSX: ABX) moved ahead $2.04 to C$52.19 on the TSX while Kinross Gold Corp. (TSX: K) gained 71 cents to $26.08.

The April crude contract on the New York Mercantile Exchange gained 41 cents to another record closing high of US$110.33 a barrel, price levels that question how much the recent surge has to do with fundamentals.

"It's fund flows here, it's speculative interest, the U.S. dollar weakness does have a lot to do with it but it's not everything – definitely speculative interest is also a contributing factor here," Watson said.

The TSX energy sector was up 1.77 per cent as EnCana Corp. (TSX: ECA) gained $2.30 to $77.96 while Suncor Energy (TSX: SU) gained $1.93 to $107.06.

In other corporate news, drugmaker Biovail Corp. (TSX: BVF) posted a fourth-quarter loss of $32 million Thursday, reversing a year-ago profit of $118 million.

The company, whose founder and biggest individual shareholder, Eugene Melnyk, is considering a push to take it private, reported revenues of $203.9 million, down sharply from $307.6 million for the fourth quarter of 2006. Its shares were up 17 cents to $13.29.

AbitibiBowater (TSX: ABH) shares dropped 30 cents to $6.49 – after earlier hitting a new 52-week low of $4.57 – over concerns about the refinancing plan of its Abitibi-Consolidated subsidiary.

And shares in commercial printer Transcontinental Inc. (TSX: TCL.A) surged $2.35 to $17.62 after it reported that its first-quarter profit expanded 69 per cent to $34.1 million as consolidated revenues increased four per cent to $596 million.

On the TSX, advances beat declines 795 to 749 with 228 unchanged as 420.3 million shares traded worth $8.05 billion.

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