The Canadian Press - ONLINE EDITION
Posted: 07/2/2013 7:55 AM | Comments: 0
Last Modified: 07/2/2013 3:43 PM
TORONTO - The Toronto stock market ended Tuesday on a high note as a surge in oil prices boosted energy stocks and rumours of U.S. wireless carrier Verizon entering the Canadian market appeared to lose steam.
The S&P/TSX composite index rose 49.27 points to 12,178.38.
The Canadian dollar fell 0.28 of a cent to 94.80 cents US — its lowest closing price in nearly two years.
On the energy front, oil prices were ahead amid political unrest as massive protests continued in Egypt to oust President Mohammed Morsi. The August crude contract on the New York Mercantile Exchange was ahead $1.61 at US$99.60 a barrel — the highest price it's been since May 3, 2012.
"There's always that layer of geopolitical turmoil and uncertainty that adds a premium in the price of oil, above and beyond the supply and demand curve," said Craig Fehr, a Canadian markets specialist at Edward Jones in St. Louis.
He said the uncertainty keeps a premium on oil prices that "ebbs and flows over time."
"Broadly, the oil complex is in the middle of a tug of war," he added.
As a result, the TSX energy sector was up 1.2 per cent.
Meanwhile, telecom shares took a surprising upturn in the session, rising 1.6 per cent, as investors bet that stock in Canadian carriers was oversold last week on expectations that Verizon Communications Inc. could enter the domestic market.
Telus (TSX:T) was up 96 cents to $31.66 while Rogers (TSX:RCI.B) gained $1.17 to $42.37. BCE Inc. (TSX:BCE) shares dropped 11 cents to $43.01.
Gold stocks led declines, off 2.9 per cent, as August bullion moved down $12.30 to US$1,243.40 an ounce on the Nymex. Copper prices fell 1.4 cents to $3.14.
On the TSX, major gold companies like Kinross Gold (TSX:K) and Iamgold Corp. (TSX:IMG) were all negative. However, Barrick Gold (TSX:ABX) was one of the biggest decliners in the sector, down 7.7 per cent, after announcing last week a delay to its US$8.5-billion Pascua-Lama project in South America.
Information technology stocks were down 0.7 per cent as Research In Motion (TSX:BB) lost 7.8 per cent, or 86 cents, to $10.22 after surprising investors with a first-quarter loss on Friday.
On Wall Street, earlier gains were overshadowed by developments in Egypt. The Dow Jones industrials fell 42.55 points to 14,932.41, the Nasdaq fell 1.09 points to 3,433.4 and the S&P 500 index was 0.88 of a point lower at 1,614.08.
Traders had found confidence in the latest U.S. auto sales numbers, which showed that shoppers who were once cautious, are returning to the market. Automaker Ford also reported its best June sales since 2006.
The confluence of easy credit, low interest rates and smart, new models are driving auto sales sharply higher this year but analysts who follow the industry don't see that changing any time soon.
The U.S. government also released its May factory orders report which showed its third consecutive month of increases. The Commerce Department said Tuesday that factory orders rose 2.1 per cent last month. April's increase was revised higher to 1.3 per cent from one per cent.
In corporate developments, Fortress Paper's shares (TSX:FTP) fell nearly four per cent after the company said an unexpected mechanical water pump failure will further delay the startup of a cogeneration facility at its specialty cellulose mill in Thurso, Que. The Vancouver-based company dropped 24 cents to $5.90.
Overseas, Asian stock markets were mostly higher as speculation that lukewarm U.S. economic indicators would keep the Federal Reserve from ending its stimulus program early offset pessimism about China's economy. Chinese manufacturing weakened in June amid a credit crunch.
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