Archive for July, 2009

TSX breaks 2-day slide on resources rush (Reuters)

Thursday, July 30th, 2009 | Finance News

TORONTO (Reuters) –
A swift return to hopes of economic recovery and a rally in prices for key Canadian commodities helped push Toronto's main stock index higher by 2 percent on Thursday.

The TSX shot higher from the get-go and hardly looked back as all 10 sectors advanced strongly, allowing the overall market to make up nearly all of the last two days of declines.

Extra credit for the rally went to the energy and materials sectors, up 2.44 percent and 3.29 percent, respectively, as the price of oil and gold rebounded from recent pressure.

Oil jumped more than 5 percent toward $67 a barrel, while gold tracked oil's rise, as U.S. economic data sparked fresh optimism that the recession may be bottoming out.

Shares of Suncor Energy led all influential advancers, up 4.44 percent at C$34.80, while Canadian Natural Resources rose 3.56 percent to C$63.95.

Driving the TSX's mining-heavy materials sector were shares of Barrick Gold Corp, up 2.99 percent at C$36.82, while gold miner Agnico-Eagle rallied 7.44 percent to C$61.08. Both companies reported quarterly results that topped estimates.

"As long as economic indicators point upward and earnings are doing better than estimates, in general I think the market's got a lot of fire under it," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

The Toronto Stock Exchange's S&P/TSX composite index finished up 221.39 points, or 2.12 percent, at 10,676.72.

($1=$1.08 Canadian)

(Editing by Rob Wilson)

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Oil jumps 5 percent, economic data raises recovery hope (Reuters)

Thursday, July 30th, 2009 | Finance News

NEW YORK (Reuters) –
Oil jumped more than 5 percent to near $67 a barrel on Thursday as economic data sparked fresh optimism that the recession may be bottoming out.

The number of U.S. workers staying on jobless rolls fell to the lowest in three months last week, government data showed, while the four-week moving average for new claims dropped by 8,250, to 559,000 -- the lowest level since late January.

Support also came from data showing euro zone economic sentiment increased in July to its highest level in eight months, helping to lift European equities to their highest close in nearly nine months.

The central bank of the world's No. 2 oil consumer, China, said on Thursday it would keep a loose monetary policy to consolidate its recovery after fears Beijing might move to tighten money supply. That had sent Chinese shares spiraling on Wednesday.

"Markets are rebounding with stocks higher, renewed optimism, and a weak dollar. Oil markets were oversold after yesterday's sharp drop and jobless data may have also provided additional support," said Tom Bentz, analyst at BNP Paribas Commodity Futures Inc.

U.S. crude settled up $3.59, or 5.7 percent, at $66.94 a barrel, nearly erasing a 5.8 percent loss posted on Wednesday after U.S. data showed a steep build in the top consumer's crude inventories. Earlier, the New York Mercantile Exchange had reported U.S. crude had settled at $66.92, before later revising the close higher.

London Brent traded up $3.58 to $70.11 a barrel.

The economic data, along with a string of solid corporate profits, helped lift equities markets while the dollar weakened as optimism whetted investor appetite for risk.

Expectations a rebound in the global economy could bolster slumping fuel demand have helped push crude up from below $33 a barrel in December, with many investors looking to stock markets for early signs of a turnaround.

The recession has battered global fuel consumption and sent crude tumbling from record highs near $150 a barrel struck in July 2008, prompting the Organization of the Petroleum Exporting Countries to agree a series of output cuts aimed at lifting prices.

Kuwait's oil minister said oil prices should rise later this year with the onset of winter heating oil demand in the Northern Hemisphere.

Energy traders have also been keeping a close eye on plans under consideration by the U.S. Commodities Futures Trading Commission to implement position limits for some commodity futures after wide price swings that have raised concern over speculation.

Some critics worry U.S. regulators may impose limits on futures positions, which could push investors away from exchange-based oil trading in contracts such as NYMEX crude.

(Additional reporting by Robert Gibbons and Gene Ramos in New York and Christopher Johnson in London; Editing by Marguerita Choy)

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Moody’s lifts rating outlook on Advance Auto Parts (AP)

Thursday, July 30th, 2009 | Finance News

NEW YORK – Moody's Investors Service said Thursday it raised its rating outlook on auto parts retailer Advance Auto Parts Inc. to positive from stable and affirmed its debt and liquidity ratings for the company.

"The change in outlook to positive reflects the improvement in Advance's credit metrics, as well as the new more conservative tone of its financial policy," Moody's said in a statement.

As for its liquidity, Moody's cited Advance's solid operating cash flow, which the ratings agency said should be more than sufficient to meet all working capital and capital expenditure requirements, with only minimal usage expected under a $750 million unsecured revolving credit line.

Moody's said it was affirming the company's "Ba1" corporate family, "Ba2" probability of default ratings, as well as its "Ba1" senior unsecured term loan, and "SGL-2" speculative grade liquidity ratings. "Ba1" and "Ba2" are non-investment, or junk grade.

Advance Auto Parts shares rose $1.58, or 3.5 percent, to $46.93 in afternoon trading Thursday.

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