By Sarah Pringle, MarketWatch
SAN FRANCISCO (MarketWatch) — Canadian stocks gained Tuesday, propelled by gold-mining stocks and a 6% rise in Bombardier Inc. shares.
The S&P/TSX Composite Index rose 95.52 points, or 0.8%, to 11,497.3. The materials sector /zigman2/quotes/210598474/delayed XX:TORGC195 +2.03% was a major contributor, up 1.8%, followed by a 1.1% rise in the energy sector /zigman2/quotes/210598495/delayed XX:TORGC187 +4.72% . Diversified mining and metals index moved back into positive territory, with a gain of 0.1%.
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Helping buoy the TSX, said Peter Buchanan, senior economist at CIBC , is hope that the Federal Reserve may in fact suggest further accommodation to support the U.S. economy at next Wednesday’s FOMC meeting. But there are still other worries, he said.
“Markets are still pretty fearful about events in Europe. The Greek election is Sunday and that’s still looming very large at this point. It certainly could stimulate turbulence,” said Buchanan.
Bombardier Inc. /zigman2/quotes/208994866/delayed CA:BBD.B -17.27% /zigman2/quotes/205775498/delayed CA:BBD.A -11.52% , manufacturer of planes and trains, was among Canada’s top percentage gainers. Its class B shares climbed 6% to C$3.87 after Bombardier said NetJets Inc. had placed an order of up to 275 Bombardier Challenger business jets. The order was the company’s largest business-aircraft sale in Bombardier history, it said, valued at approximately $7.3 billion. Read more on Bombardier order.
Gold miners also tacked on major gains as gold prices jumped. IAMGold Corp. /zigman2/quotes/206182143/delayed CA:IMG +0.82% rose 4.5%, Eldorado Gold Corp. /zigman2/quotes/207321207/delayed CA:ELD +0.87% gained 4%, and Osisko Mining Corp. /zigman2/quotes/205809926/delayed CA:OSK 0.00% added 4.5%.
Gold futures jumped $17, or 1.1%, to $1,613.80 an ounce, lifted by safe-haven demand as Spanish and Italian bond yields spiked, reflecting concern about euro-zone contagion. Read more on gold.
Oil futures climbed 0.8% to $83.32 a barrel. Canadian Oil Sands Ltd. rose 1.7%. Read more on oil.
A slightly weaker U.S. dollar, said Buchanan, as well as more willingness to take on risk following the Spanish bailout, is helping drive commodities. Movement of oil futures can also be explained by hints of news to come out later this week, he said.
“Giving some support to oil is people are looking ahead to the OPEC meeting Thursday,” said Buchanan. Read more on what's expected from OPEC.
In currency trading, the Canadian dollar /zigman2/quotes/210561978/realtime/sampled USDCAD -0.3261% gained against its U.S. counterpart, with one U.S. dollar buying C$1.0258 versus C$1.0311 late Monday. Over the past three months, the U.S. dollar has gained 3.4% against the loonie.