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By Franco Pingue
Reuters
Tuesday, August 30, 2005
TORONTO (Reuters) - Toronto stocks closed higher on Tuesday as energy issues rallied around record oil prices, but the other sectors tempered the gain due to concerns about corporate earnings and consumer spending.
Adrian Mastracci, investment counsel at Vancouver’s
‘fee-only’ KCM Wealth Management, says, "We had a pretty good run up, especially in Canada, and it's not unusual for people to take some profits.”
The Toronto Stock Exchange S&P/TSX composite index <.GSPTSE> rose 14.66 points, or 0.14 percent, to 10,573.06.
Energy shares made up the bulk of the gain as oil prices surged to a new record one day after Hurricane Katrina hit the Gulf Coast, which increased fears of reduced supply.
"It's not surprising that energy is doing well with the hurricane influence and oil prices pushing $70 a barrel," said Murray Leith Jr., director of research at Odlum Brown.
"But people are starting to get concerned that high energy prices are going to have a negative influence on the economy."
The energy sector rose 1.69 percent, while a 0.4 percent advance by the telecoms group was next in line. Three of the TSX's 10 main subindexes ended higher.
U.S. crude hit a record $70.85 a barrel before settling at $69.81 as the storm shut nearly all of the Gulf of Mexico's oil production.
Shares of EnCana Corp., the main contributor to the market's gain, rose C$1.50, or 2.7 percent, to C$56.20, while Canadian Natural Resources jumped C$1.44, or 2.6 percent, to C$56.23.
ATI Technologies erased earlier losses and closed ahead as investors felt the company's latest sales warning from late on Monday would end a string of bad news.
Shares of ATI rose 47 Canadian cents, or 3.5 percent, to C$13.98. The overall information technology sector fell 1.5 percent.
Financial stocks ignored a 7 percent gain in Bank of Nova Scotia's third-quarter profit that matched estimates. The influential sector finished just 0.1 percent higher.
Shares of Scotiabank eased 8 Canadian cents, or 0.19 percent, to C$41.02, while Bank of Montreal rose 60 Canadian cents, or 1 percent, to C$58.31.
With the market getting set to enter what is traditionally a weak period, investors are not fretting over the potential for pullback given the massive advance so far this year.
"We had a pretty good run up, especially in Canada, and it's not unusual for people to take some profits," said Adrian Mastracci, investment counsel and president at KCM Wealth Management Inc.
Market momentum was negative as 782 issues declined and 673 advanced on a heavy volume of 260 million shares valued at C$4 billion.
The blue-chip S&P/TSX 60 index <.TSE60> finished ahead 1.68 points, or 0.28 percent, at 594.64.
U.S. markets, which have a much lighter weighting in energy stocks than Toronto's key index, had nowhere to turn for help as the higher oil prices renewed worries about consumer spending and the effect on the economy.
The Dow Jones industrial average <.DJI> fell 50.23 points, or 0.48 percent, to 10,412.82, while the Nasdaq composite index <.IXIC> dropped 7.89 points, or 0.37 percent, to 2,129.76.
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