North American Markets rallied for the third consecutive day, on the back of plethora of good news across several sectors. Banks however led the way on Thursday as well. Dow surged 240 points to 7,170 marking biggest three-day jump since last November. Broad based S&P 500 and NASDAQ also added 29.38 and 54.46 points to close at 750.74 and 1,426.10 respectively. Banks and oil stocks propelled Toronto and TSX gained 271.25 points or 3.4 percent to reach 8,282. TSX venture index also jumped 19.52 points to close at 843. The Canadian dollar also advanced 0.43 cent to 78.18 cents.
New York cheered an accounting board’s suggestion to the Congress to consider relaxation in financial reporting rules of tough-to-sell assets held by banks which is expected to help their reported earnings. Valuation of these toxic assets has been a major drag on banking stocks and any relaxation is expected to boost their net income. Better-than-expected retail sales figures as well as positive news from Bank of America Corp. (NYSE: BAC), General Electric Co. (NYSE: GE), General Motors Corp. (NYSE: GM), and Pfizer Inc (NYSE: PFE) also helped Dow Jones.
Investors greeted improved American retail data as the Commerce Department confirmed just a 0.1 per cent decline in sales last month compared to the 0.5 per cent drop analysts expected. Excluding autos, retail sales have risen 0.7 per cent. In another news, Bernard Madoff, the disgraced financier was sent to jail for defrauding billions of dollars from his investors. Madoff was taken to jail in handcuffs to the applause of his victims.
Financials
Banking and insurance remained the main driving force in both Toronto and New York. Citigroup added another 8.4 percent to close at $1.67 continuing its spectacular rally since Tuesday. Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS) also added 7.42 percent and 5.26 percent to close at $24.18 and $97.25 respectively. JPMorgan Chase (NYSE: JPM) rose sharply by 13.7 percent to reach $23.20. Bank of America (NYSE: BAC) also recorded a whopping 19 percent gain to $5.85.
US insurers continued to rally. Hertford Financial Services Group (NYSE: HIG), Prudential Financial (NYSE: PRU) and Lincoln National Corp (NYSE: LNC) gained 13.5 percent, 27 percent and 14.9 percent respectively. The three insurers have gained over 40 percent over the last three days.
Financials saw continued gains in Toronto as well. TD Bank recorded an impressive 3.37percent gain to close at $41.10 while Bank of Nova Scotia (TSX: BNS) added 3.62 percent or $1.05 to close at $30.05. Bank of Montreal (TSX: BMO) gained $1.83 to $31.93 while CIBC (TSX: CM) also gained 4.87 percent to close at $43.96. Royal Bank (TSX: RY) also added $1.43 or 4.3 percent to $35.00.
Metals
Base metals and precious metals continued to rally in both sides of the border. In Toronto, Teck Cominco Ltd. (NYSE: TCK) added $0.40 to close $5.00. FNX Mining (TSX: FNX) also added 29 cents to $4.17. Cameco Corp. (TSX: CCO) meanwhile fell 24 cents to $19.80 while Silver Wheaton Corp. (TSX: SLW) agreed to purchase Silverstone Resources Corp. (TSXV: SST) in an all-stock deal valued at $190 million. Silver Wheaton shares gained 14 cents to $8.08 while Silverstone rose 20 cents to $1.45.
The gold bullion added $13.30 to US$924 an ounce on the New York Mercantile Exchange. Goldcorp Inc. (TSX: G) gained $0.48 to $36.48 while Barrick Gold Corp. (TSX: ABX) added $1.60 or 4.5 percent to $36.94. Kinross Gold (TSX: K) inched $0.10 to $19.82. In the US, Newmont Mining (NYSE: NEM) rallied $0.90 to close at $37.56. AngloGold Ashanti (NYSE: AU) soared 8.97 percent up while Goldfields (NYSE: GFI) added 7.64 percent to close at $12.40.
Energy
Oil gained $4.70 to US$47.03 a on the rumour that Russia may join the OPEC. Petro-Canada (TSX: PCA) gained $1.12 (3.9 percent) to $29.93 while Canadian Natural Resources (TSX: CNQ) gained $3.12 (6.9 percent) to $48.01. EnCana Corp. (TSX: ECA) added $0.55 to $49.70 while Suncor Energy Inc. (TSX: SU) also rallied $1.91 to $32.27. Husky Energy (TSX: HSE) also rallied 3.3 percent to close at $27.50.
In the US Exxon Mobil Corp. (NYSE: XOM) gained $1.38 to close at $67.15 while Chevron Corp. (NYSE: CVX) gained $2.18 (3 percent) to reach $63.40. ConocoPhillips (NYSE: COP) fell $0.59 to close at $37.39 while Marathon Oil (NYSE: MRO) gained $0.98 to $23.57. BP plc (NYSE: BP) gained $1.03 to close at $38.24.
The rally continues in Asia as well at the time of writing.