TORONTO (CBS.MW) - Canadian stocks rose Tuesday, led by oil and gas issues as some investors wagered that share prices in the sector don't reflect the outlook for profit growth.
Talisman Energy stoked demand for petroleum issues after topping second-quarter estimates yesterday. The stock was reiterated "strong buy" by analysts at Raymond James & Associates. Networks, Celestica and a handful of other technology issues contributed to the advance.
Investors paid little attention to Canadian gross domestic product figures out Tuesday that showed the economy grew 0.3 percent in May. Though it was the biggest advance in seven months, the pace was helped by a slew of education and provincial workers that returned to their jobs after a strike in the previous month. See full story.
A raft of U.S. economic data, which added to evidence that the U.S. economy continues to slow more than previously anticipated, bolstered expectations for lower U.S. interest rates ahead.
The Toronto Stock Exchange 300 Composite Index (CA:TSE300: news, chart, profile) rose 49.60 points, or 0.6 percent, to 7,691, erasing its 40 point slide yesterday. Ten of the TSE 300's 14 sub-indices rose and four fell with the oil and gas group staging the sharpest advance.
The S&P/TSE 60 gained 0.7 percent while the Nasdaq Canada Index, a collection of Canadian companies that trade on the U.S. based Nasdaq market, rose 1.4 percent. The CDNX Index of small technology and natural resource companies that trade on the Canadian Venture Exchange fell 0.1 percent.
In the U.S., the Dow Jones Industrial Average ($DJ: news, chart, profile) jumped 1.6 percent and the Nasdaq Composite Index ($COMPQ: news, chart, profile) rose 1.7 percent. See full story.
Talisman Energy (CA:TLM: news, chart, profile) (TLM: news, chart, profile) jumped C$1.80, or 3 percent, to C$60.30. Canada's largest independent oil and gas company, said yesterday that second-quarter net income rose to C$237 million ($153 million), or C$1.71 a share, from C$214 million, or C$1.51 a share, for the same period a year earlier as rising natural gas prices offset a decline in crude prices and production.
The result topped the analysts' average estimate of C$1.47 a share, according to First Call/Thomson Financial.
The Calgary-based exploration and production company said cash flow, considered the best gauge of the health of petroleum companies, climbed to C$641 million, or C$4.73 a share, from C$573 million, or C$4.14 a share in the year ago quarter. Revenue rose to C$1 billion from C$962 million.
"As one of the premier independent oil and gas producers in North America, we believe Talisman is undervalued at these levels," said Wayne Andrews, an analyst at Raymond James.
Andrews raised his year-end earnings estimates to $6.61 a share from $6.35 a share previously and lifted his 2002 forecast to $6.61 from $6.56.
Among other companies in the sector, Alberta Energy (CA:AEC: news, chart, profile) rose 30 cents to C$60.30, Anderson Exploration (CA:AXL: news, chart, profile) gained 85 cents to C$27.75 and Canadian Hunter (CA:HTR: news, chart, profile) advanced C$1 to C$34.50.
TD Waterhouse (CA:TWE: news, chart, profile) rose 15 cents to C$14.60. The discount brokerage said late Monday that it's cutting 600 jobs and closing facilities in a restructuring effort to cope with a decrease in investor trading and borrowing activity.
TD Waterhouse, which is owned by Toronto-Dominion Bank (CA:TD: news, chart, profile) (TD: news, chart, profile) and has been paring its workforce through attrition, is cutting jobs by another 9 percent and shuttering 17 U.S. branches and a call center in Chicago. As a result, the company said it expects to take a $35 million charge in the third quarter.
TD Bank was unchanged at C$25.38.
Martin Cej is global markets editor for CBS.MarketWatch.com in San Francisco. |
