TSX racks up solid gain, traders look for stability after major sell-off | iNFOnews | Thompson-Okanagan's News Source
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TSX racks up solid gain, traders look for stability after major sell-off

People walk in Toronto's financial district in Toronto, on Oct. 29, 2012. THE CANADIAN PRESS/Nathan Denette
Original Publication Date October 20, 2014 - 6:40 AM

TORONTO - The Toronto stock market closed sharply higher Monday as investors snapped up oversold stocks for a third day in hopes a bottom is close in the sell-off that has plagued markets this month.

The S&P/TSX composite index gained 110.09 points to 14,337.77 — its third straight triple-digit advance.

"It was incredibly encouraging to see we got that late-week rebound (last week), which suggests that the market isn't so fragile," said Craig Fehr, Canadian markets specialist at Edward Jones in St. Louis, adding markets haven’t seen an end of volatility in the near term.

The Canadian dollar slipped 0.06 of a cent to 88.62 cents US.

U.S. markets were higher with the Dow industrials up 19.26 points to 16,399.67, held back by a seven per cent slide in IBM stock.

The Dow heavyweight announced that its adjusted earnings were $3.68 per share while revenue totalled $22.4 billion. Analysts expected $4.32 per share on revenue of $23.39 billion. IBM also said that it will pay $1.5 billion to Globalfoundries in order to shed its costly chip division. It took a $4.7-billion charge for the third quarter as it also delivered a disappointing outlook.

The Nasdaq climbed 57.63 points to 4,316.07 and the S&P 500 index rose 17.25 points to 1,904.01.

The TSX found support from Valeant Pharmaceuticals International Inc. (TSX:VRX), which reported adjusted earnings of $718.8 million or $2.11 per share, 11 cents ahead of forecasts. Valeant also raised its fourth-quarter adjusted profit estimate and its 2015 revenue growth forecast and its shares rose $5.30 to C$140.74.

The gold sector was the leading group as the December gold contract gained $5.70 to US$1,244.70 an ounce. The December copper contract was two cents lower at US$2.99 a pound.

Rogers Communications (TSX:RCI.B) helped lift the telecom sector and its shares gained $1.39 to $43.67 as it announced that it was teaming with Netflix to deliver the original survivalist thriller series "Between." It is Netflix's first partnership with a Canadian broadcaster.

The TSX is down about nine per cent from its September highs, the Dow is down five per cent and the S&P 500 is off 6.5 per cent amid worries the eurozone could slip back into recession and a global economic downgrade by the International Monetary Fund.

Central banks have also figured largely in the market sentiment. The sell-off began amid concerns that have grown over the ending this month of the U.S. Federal Reserve's key stimulus program. The Fed's purchase of hundreds of billions of dollars of bonds has kept long-term rates low and encouraged the rally on stock markets over the last few years.

The energy group was flat, with the November crude oil contract down four cents to US$82.71 a barrel. The energy sector is down 15 per cent in the last month as demand concerns and rising supplies have sent oil down 14 per cent over that time.

The industrials sector was also flat as Canadian Pacific Railway Ltd. (TSX:CP) confirmed it held exploratory talks about a possible combination with U.S. railway CSX Corp. but those discussions ended without a deal and no further talks are planned. CP shares dropped $3.34 to C$221.65 a day before it and rival Canadian National Railway (TSX:CNR) release earnings.

News from © The Canadian Press, 2014
The Canadian Press

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