By Malcolm Morrison, The Canadian Press
TORONTO - The Toronto stock market was positive Thursday morning and commodity prices advanced after the U.S. Federal Reserve's latest move to support the U.S. economy.
The S&P/TSX composite index well off early highs because of losses in the financial sector but still up 20.57 points to 12,559.79 while the TSX Venture Exchange rose 17.59 points to 1,621.64.
The Fed announced Wednesday that it would keep interest rates near zero until late 2014 in a sign that the economy needs considerable support for some time to come. But the move also reassured investors that the Fed is willing to undertake stimulus to encourage growth.
The Canadian dollar could be headed for its first close above parity with the U.S. dollar for the first time since the end of October, rising 0.38 of a cent to 100.03 cents US. The loonie earlier went as high as 100.05 cents US as the Fed move encouraged traders to take on more risk.
U.S. markets also advanced with the Dow Jones industrial average ahead 73.26 points to 12,830.22. The Nasdaq composite index gained 13.55 points to 2,831.86 and the S&P 500 index was ahead 4.07 points to 1,330.13.
Traders also digested a durable goods orders report from the U.S. that beat expectations.
Orders to factories for long-lasting manufactured goods increased by three per cent in December after business stepped up spending on machinery and other capital goods. Economists had expected a two per cent rise.
However, other data showed that the number of people seeking unemployment benefits rose last week to a seasonally adjusted 377,000, after a nearly four-year low the previous week.
Prices for oil and metals ran up smartly on Thursday with the February crude contract on the New York Mercantile Exchange ahead $1.78 to US$101.18 a barrel. The energy sector was flat and Suncor Energy (TSX:SU.TO - News) gained 32 cents to $34.75.
The mining sector was up 1.16 per cent as the March copper contract in New York gained seven cents to US$3.90 a pound. Copper prices have surged more than 13 per cent during January amid signs of an improving economic conditions in the U.S. and China, which is the world's biggest consumer of copper. The metal has a reputation as an economic bellwether since it is used in so many businesses. Teck Resources (TSX:TCK-B.TO - News) ran up 83 cents to $43.30.
The gold sector climbed 1.32 per cent as February bullion was up $28.20 to US$1,728.30 an ounce. Barrick Gold Corp. (TSX:ABX.TO - News) improved by 47 cents to $49.07.
The financials sector was the major decliner, down 0.59 per cent with Manulife Financial (TSX:MFC.TO - News) down 48 cents to $12.07 while Bank of Nova Scotia (TSX:BNS.TO - News) declined 43 cents to $53.09.
There was also positive news out of Europe.
Italy easily raised €5 billion from the markets Thursday in a pair of bond auctions that saw a sharp drop in borrowing rates. The sale showed healthy investor appetite in the first test of market sentiment since ratings agency Standard & Poor's on Jan. 13 dropped Italy's credit rating by two notches.
Italy has seen its borrowing costs ease in recent weeks, after yields on benchmark 10-year bonds pushed to the perilous seven-per cent level last year. The 10-year bonds were trading at 6.04 per cent on the secondary market after Thursday's auction.
And Greece resumed talks with its private creditors in order to get a deal to avoid a potentially disastrous default.
The €100-billion private debt writedown is a vital condition of a new bailout for Greece, which has been relying on international rescue loans since May 2010.
Under the deal, banks and other private sector investors would swap their Greek government bonds for new ones with half the face value, longer repayment deadlines and potentially lower interest rates.
If the writedown fails, Greece will be unable to repay a €14.5-billion bond on March 20.
European markets ran ahead with London's FTSE 100 index up 1.2 per cent, Frankfurt's DAX gained 1.73 per cent and the Paris CAC 40 advanced 1.44 per cent.
In Asia, gains were generally more muted. South Korea's Kospi rose 0.3 per cent and Hong Kong's Hang Seng Index jumped 1.6 per cent on its first trading day since the Chinese New Year holiday. Japan's Nikkei was 0.4 per cent lower.
Markets in Taiwan and mainland Chinese remained closed for the Chinese New Year. Markets in India and Australia were closed for public holidays.
It was also a busy earnings day for Canadian companies.
Canadian Pacific Railway Ltd. (TSX:CP.TO - News) reported fourth-quarter net income of $221 million, an increase from $186 million in the same period a year earlier. Revenue grew to $1.4 billion from $1.29 billion and its shares shed 54 cents to $71.11.
Potash Corporation of Saskatchewan Inc. (TSX:POT.TO - News) said its profits grew in the fourth quarter to US$683 million or 78 cents a share, up from $508 million a year ago. However, earnings were 11 cents short of expectations.
Sales grew to $1.87 billion from $1.81 billion and its shares gained 28 cents to $45.76.
Elsewhere, Mobile phone maker Nokia Corp. posted a fourth-quarter net loss of €1.07 billion as sales slumped 21 per cent even as the company's first Windows smartphones hit markets in Europe and Asia. However, its shares were up 14 cents to US$5.41.
Caterpillar reported that its fourth-quarter profit jumped 60 per cent to US$1.55 billion, boosted by a steep increase in global demand for its products. The world's largest maker of construction and mining equipment reported sales and revenue jumped 24 per cent to $17.24 billion and also issued 2012 guidance above analyst predictions. Its shares gained $3.52 to US$112.57.
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