TORONTO - The Toronto stock market closed higher Monday as traders look to a key speech by the chairman of the U.S. Federal Reserve Board for assurance that the central bank will do whatever it takes to keep the economy from slipping back into recession.
The S&P/TSX composite index ran up 60.89 points to 12,068.36. But it was another volatile session, charging ahead by as much as 211 points earlier in the session.
Investor nervousness was also reflected in the gold sector as traders looking for safety pushed the precious metal further into record territory. Bullion had its fourth consecutive record high close, ending the session a few dollars short of the US$1,900 level.
The TSX Venture Exchange was ahead 1.92 points to 1,766.76.
The Canadian dollar was down 0.15 of a cent to 101 cents US.
New York markets were also positive amid another day of big swings. The Dow Jones industrial average surged just over 200 points during the morning, gave up all gains around midday, but later closed up 37 points to 10,854.65.
The Nasdaq composite index advanced 3.54 points to 2,345.38 and the S&P 500 index added 0.29 of a point to 1,123.82.
Both the TSX and the Dow Industrials tumbled about four per cent last week on worries about the health of the U.S. and global economies and levels of European bank funding without a lasting solution for Europe's debt troubles.
"The question really is, how fast is the recovery happening?" said Chris King, portfolio manager at Morgan, Meighen and Associates.
"But it is still a recovery. And I don't understand these markets, they're unusually fickle for no reason, I think there are very serious problems with the euro that are very real and affecting capital markets worldwide with good reason. But the U.S. and North America and Canada particularly I don't see a big problem."
Investors are now looking ahead to Friday and a speech by Fed chairman Ben Bernanke.
The Fed pledged earlier this month to keep interest rates at ultra-low levels through mid-2013. Investors wonder whether Bernanke will announce, or at least preview, further steps to help the economy including a third round of bond purchases known as quantitative easing.
A commitment by Bernanke last August to do whatever it took to keep the American economic revival on the rails during the Fed's retreat at Jackson Hole, Wyo., sparked a rally on markets that only started to run out of steam at the start of the second quarter of this year.
The December gold contract on the Nymex advanced $39.70 to US$1,891.90, lifting Barrick Gold Corp. (TSX:ABX) $1.32 to C$51.64 and Goldcorp Inc. (TSX:G) improved by $2.47 to $53.65.
Telecoms were also strong with BCE Inc. (TSX:BCE) ahead 60 cents to $38.84 while Telus Corp. (TSX:T) climbed 49 cents to $52.12.
Oil prices recovered somewhat following a 3.6 per cent slide last week as the September crude contract on the New York Mercantile Exchange, which expired Monday, gained $1.86 to US$84.12 a barrel while October crude gained $2.01 to US$84.42 a barrel. However, Brent crude prices fell as Libyan rebels captured most of the country's capital, boosting hopes the OPEC nation's oil exports could resume soon. The October contract declined $1.50 to US$107.12 a barrel late in the North American trading day.
Brent has been at unusual premium to the U.S. crude futures contract for months, in large part due to the fact that Europe relies more than the U.S. on oil from Africa, including Libyan imports.
However, the TSX energy sector gave up early gains, losing 0.34 per cent as Suncor Energy (TSX:SU) declined 39 cents to $28.83 while Cenovus Energy (TSX:CVE) climbed 60 cents to C$32.77.
The base metals sector also erased early gains to move down 2.32 per cent while the September copper contract lost early momentum and turned down three cents at US$3.96 a pound. First Quantum Minerals (TSX:TCK.B) was down $1.15 to C$20.06 while Sherritt International (TSX:S) advanced nine cents to $5.05.
The financial sector declined 0.74 per cent a day before the big Canadian banks start to report quarterly earnings. Bank of Montreal (TSX:BMO) hands in earnings on Tuesday, National Bank (TSX:NA) is out on Thursday while Royal Bank (TSX:RY) reports on Friday.
"I think the banks will actually continue to show sequential and year over year improvements," added King.
"In BMO's case, it will be interesting because it will be the first quarter with M and I incorporated in it," referring to the bank's acquisition of U.S. bank Marshall & Ilsley Corp. last December for US$4.1 billion in shares.
"And that seems to have gone much better than what people expected. I think it was a very astute acquisition by BMO."
Bank of Montreal was unchanged at $57.35, National Bank slipped 85 cents to $69.49 and Royal Bank fell 49 cents to $48.48.
In other corporate news, Clearwater Seafoods Income Fund (TSX:CLR.UN) has put into place a defence plan as Canada's largest shellfish and lobster producer tries to fend off an unsolicited bid from Cooke Aquaculture Inc. Clearwater's plan allows its board of trustees to pursue alternatives. Cook'e has offered to buy the remaining units of Clearwater that it doesn't own for $3.50 each, valuing the income fund at about $97.1 million. Clearwater units were up 35 cents to $2.75.
Endeavour Mining Corp. (TSX:EDV) and Adamus Resources Ltd., (TSXV:ADU), two international companies which trade on Canadian stock markets, have agreed to merge into a new company focused on gold mining in West Africa. Shareholders of Endeavour will own 55 per cent of the yet-to-be-named combined company, with shareholders of Perth, Australia-based Adamus owning 45 per cent. Endeavour shares rose 15 cents to C$2.59.
Paladin Energy Ltd. (TSX:PDN) has reached uranium sales agreements worth about $168 million with three new customers in the United States. The deals call for the Australian mining company to supply the buyers with more than 2.8 million pounds of uranium oxide concentrate. Paladin shares gained seven cents to $2.05.
