Business torrents

The Toronto stock market put in a solid advance today amid higher energy and financial stocks after the U.S. Federal Reserve lowered its key funds rate a quarter point to two per cent.

But New York markets came down from strong gains at the time of the announcement – a move that some suggested was because the Fed left investors in the dark about the central bank's next move.

"I don't think the Fed at this point is thinking one way or the other," said Diane Dercher, chief economist at Waddell & Reed in New York.

"I don't think in their mind that they have a next move in place."

The Fed said in a statement that the economy "remains weak" and that "uncertainty about the inflation outlook remains high."

Toronto's S&P/TSX composite index finished the session ahead 109.94 points to 13,935.54 despite a report showing the economy actually shrank by 0.2 per cent in February.

Wholesalers of motor vehicles and of building supplies bore much of the burden during February's slide. But there were also declines in retail trade along with oil-and-gas extraction and exploration.

The TSX Venture Exchange rose 22.17 points to 2,455.06 while the Canadian dollar headed up 0.47 of a cent to 99.29 cents U.S.

The Dow Jones industrials moved down 11.81 points to 12,820.13 after data showed the U.S. economy still registering some growth during the first quarter and General Motors Corp. gave strong support to the blue chip index with a smaller than expected quarterly loss.

The Nasdaq composite index declined 13.3 points to 2,412.8 and the S&P 500 index was down 5.35 points to 1,385.59.

General Motors Corp. reported a $3.3 billion first-quarter loss, due in part to a weak U.S. market, a strike at a major parts supplier and plummeting sales of sport utility vehicles and pickups.

That worked out to a loss of 62 cents a share versus the US$1.62 a share loss that analysts had expected and its shares were up $2 or 9.43 per cent to US$23.20.

GM also cut its industry-wide U.S. sales outlook for the year.

The U.S. Commerce Department reported that the American economy grew by an annualized rate of 0.6 per cent in the first quarter because of housing and credit problems, the same as in the final three months of last year.

The statistic did not meet what economists consider the classic definition of a recession, which is a retraction of the economy for two consecutive quarters.

On the TSX, the energy sector rose 1.5 per cent as oil prices reversed direction and turned lower after a report from the U.S paydayloans. Department of Energy showed U.S. crude inventories rose more than expected last week, up 3.8 million barrels to 319.9 million barrels. Gasoline supplies fell by 1.5 million barrels.

Light, sweet crude for June delivery declined $2.17 to $113.46 a barrel on the New York Mercantile Exchange after falling almost US$3 a barrel Tuesday, partly because of a rising American currency.

EnCana Corp. (TSX: ECA) advanced $1.15 to $81.25 and Canadian Natural Resources (TSX: CNQ) moved up $2.74 to $85.55 after it said its Horizon oilsands project is 94 per cent complete and it foresees no additional cost overruns since it announced the project could run as much as 28 per cent over the initial $6.8-billion budget.

Talisman Energy Inc. (TSX: TLM) shares were ahead 21 cents to $20.37 after it reported first quarter earnings were $466 million, or 46 cents per share, down 10 per cent from the same period last year, mainly due to gains on asset sales in the prior year.

The financials were up 0.77 per cent with Royal Bank (TSX: RY) ahead 97 cents to $48.02 and CIBC (TSX: CM) gained $1.53 to $74.17.

Gold prices were lower with the June contract on the New York Mercantile Exchange down $11.70 to US$865.10 an ounce. The gold sector rose 2.85 per cent as Kinross Gold (TSX: K) advanced 72 cents to $19.03.

Shares in miner Crystallex International Corp. (TSX: KRY) plunged 69 cents or 42.86 per cent to 92 cents after it said Venezuela's environment ministry has denied an exploration request for its Las Cristinas project in that country.

In other earnings news, Loblaw Companies Ltd.'s (TSX: L) first quarter earnings rose almost 15 per cent to $62 million from $54 million in the same quarter last year as sales rose to $6.5 billion and restructuring charges fell off significantly. Its shares moved ahead $2.28 to $31.83.

Brookfield Asset Management Inc. (TSX: BAM.A) shares rose $2.10 to $32.85 after it said it earned US$197 million in the first quarter, compared to a profit of US$195 million in the year-ago period.

Torstar Corp. (TSX: TS.B) reported a first-quarter loss of $3.5 million, down from a profit of $15.7 million in the year-ago period on lower sales and restructuring charges and its shares shed $1.80 to $15.35.

On the TSX, advances beat declines 865 to 719 with 252 unchanged as 460 million shares traded worth $8.3 billion.

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