BUSINESS

Toronto stock market ends with small gains as oil drops to 6-week low

09/19/2012 08:47 EDT | Updated 11/19/2012 05:12 EST
TORONTO - The Toronto stock market ended relatively flat on Wednesday as oil prices tumbled to a six-week low, while housing data was mixed for the U.S. and Canada.

The S&P/TSX composite index was ahead 13.45 points to 12,436.16 after trading in tight range throughout the session. The TSX Venture Exchange rose 20.88 points to 1,343.52.

The Canadian dollar increased 0.01 of a cent to 102.62 cents US.

The lack of any major direction comes after North American stock markets made significant gains last week on the back of an announcement from the U.S. Federal Reserve of an open-ended plan to spend US$40 billion a month on a new round of bond purchases. And it will continue to do so until the job market shows substantial improvement.

"We've had a real strong move this month on a lot of stimulus, both within Europe and the U.S.," said Jeff Bradacs, portfolio manager at Manulife Asset Management.

"I think the market's just taking the pause. For the next leg in the market it will (be) to see that stimulus run down into the economy and whether it picks up with macroeconomic data."

On Wednesday, the energy sector was the biggest decliner, off one per cent, with Talisman Energy (TSX:TLM) falling 18 cents to $14.07.

October crude on the New York Mercantile Exchange moved down $3.31 to US$91.98 a barrel, touching a six-week low.

The U.S. Energy Information Administration's weekly report said that crude inventories rose three times more than analysts had expected last week. Crude supplies grew by 8.5 million barrels to 367.6 million barrels. That's 8.4 per cent higher than at the same time last year.

Gold stocks rose 1.1 per cent, while the December bullion increased 50 cents to closing the session at US$1,771.70 an ounce. December copper was up 2.7 cents to US$3.81 a pound.

In economic data, a report from the U.S. Commerce Department said that builders started construction on more homes in August, driven by the fastest pace of single-family home building in more than two years.

Construction of new homes and apartments rose 2.3 per cent to a seasonally-adjusted annual rate of 750,000 last month.

A separate report on U.S. home sales from the National Association of Realtors said they jumped to the highest level in more than two years in August. Sales rose 7.8 per cent to a seasonally-adjusted annual rate of 4.82 million, the most since May 2010.

The picture of the Canadian housing market was somewhat less robust, with the Teranet–National Bank National Composite House Price Index showing that prices rose a meagre 0.2 per cent in August from the month prior. That marks the weakest month-over-month increase in 12 years.

On Wall Street, the Dow Jones industrials gained 13.32 points to 13,577.96. The Nasdaq composite index trekked ahead 4.82 points to 3,182.62 and the S&P 500 index was 1.73 points higher to 1,461.05.

Japan's main stock market hit a four-month high Wednesday after the country's central bank eased monetary policy to shore up fragile economic growth, but the positive momentum ground to a halt in Europe.

The Bank of Japan said it was increasing its asset purchasing fund to 55 trillion yen (US$700 billion) from 45 trillion yen to counter the strength of the Japanese currency. A strong yen makes it more difficult for Japanese companies to compete in international markets.

In Canadian corporate developments, B2Gold Corp. (TSX:BTO) plans to acquire CGA Mining Ltd. (TSX:CGA) and its producing Masbate mine in a friendly all-stock deal they value at $1.1 billion. B2Gold stock fell 51 cents or 11.9 per cent to $3.79 while CGA's rose six cents or 2.3 per cent to $2.71.

Air Canada (TSX:AC.B) said it is a couple of weeks away from announcing details of its plan to launch a separately managed low-cost airline that will service transatlantic and leisure routes in the Caribbean and the United States. Its shares rose six per cent, or seven cents, to $1.23.

CVTech Group Inc. (TSX:CVT) has been awarded three contracts valued at roughly US$68.8 million by of one of the largest utility companies in the United States. Shares of the company increased 10 per cent, or 10 cents, to $1.10.

And shares of Centerra Gold Inc. (TSX:CG) gained more than 16 per cent after the company said its Boroo mine in Mongolia has received the needed regulatory approvals to resume heap leach operations. Shares rose $1.71 to $11.95.