TSX surges on energy gains, rising oil prices
Written on October 21, 2008
The Toronto stock market surged almost 300 points yesterday, led by big gains in energy stocks after oil prices turned around following steep losses in three sessions.
However, gains on New York markets evaporated as the latest American home construction and consumer data reminded investors of the depth of the economic slowdown and prompted a wave of selling in the final hour.
Banks and insurance companies were also a big reason that Toronto’s S&P/TSX composite index came back from a morning deficit of about 200 points to close up 292.52 points at 9,562.49.
The Toronto market ended the week up a healthy 497.33 points or 5.5 per cent, with financials up 10 per cent in the wake of an announcement that Ottawa will buy up to $25 billion in mortgages from the banks and shift them to Canada Mortgage and Housing Corp. But the main TSX index is down 19 per cent since the first of the month.
The TSX Venture Exchange gained 8.33 points to 946.12, while the Canadian dollar edged 0.38 cent (U.S.) lower to 84.25 cents.
New York’s Dow Jones industrial average, up over 300 points at one point, closed down 127.04 points to 8,852.22. The Nasdaq composite index was 6.42 points lower to 1,711.29 and the S&P 500 index moved down 5 cash advance loan.88 points to 940.55.
The market’s rise came against a background of deepening economic gloom. The U.S. Commerce Department reported construction of new homes plunged by a bigger-than-expected 6.3 per cent in September. And the University of Michigan’s index of consumer confidence took its steepest-ever slide, to 57.5 from September’s 70.3.
Andrew Pyle, a wealth adviser at ScotiaMcLeod, said there’s a tug of war between the government bailouts and retail investors "who really don’t want any part of this market until things settle down. And that’s giving us these massive swings as we see daily now."
On the TSX, the energy sector was up 6.9 cent after three days of oil-price declines that took crude below $70 a barrel for the first time since August 2007. The November crude contract on the New York Mercantile Exchange gained $2 to $71.85 a barrel ahead of OPEC’s meeting on prices next week.
EnCana Corp. gained $3.38 to $49.88 and Suncor Inc. rose $2.02 to $26.22.
Canadian Press
Filed in: economics.