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UPDATE 3-Toronto stocks yanked higher by robust resources
Reuters: [2008-05-15 23:35:00]
(Adds details, quotes)
*Index closes at record high
*Resource and financial sectors rally
By Leah Schnurr
TORONTO, May 15 (Reuters) - The Toronto Stock Exchange's main index popped up more than 1 percent on Thursday, propelled further into record high territory by strong resource and financial shares.
Inmet Mining <IMN.TO> was the biggest net gainer on the day, rising C$6.25, or 9.3 percent, to C$73.75. Fertilizer company Potash Corp of Saskatchewan <POT.TO> was also among the leaders, finishing up C$5.28, or 2.7 percent, at C$204.50.
Gold producers also jumped, benefiting from rising gold prices. Agnico-Eagle Mines <AEM.TO> was up C$3.38, or 5.3 percent, at C$67.29, while the gold subindex gained 3.6 percent.
The S&P/TSX composite index <.GSPTSE> closed up 201.75 points, or 1.38 percent, at 14,828.06 with all but one of its 10 main sectors moving higher.
The surge helped the benchmark climb further into record territory, continuing the week's trend after it broke last summer's record high on Monday.
The financials sector, the biggest group on the index by weight, rose 1.6 percent, with Toronto-Dominion Bank <TD.TO> rising 94 Canadian cents, or 1.4 percent, to C$68.51, and Canadian Imperial Bank of Commerce <CM.TO> up 83 Canadian cents, or 1.1 percent, at C$74.84.
Adrian Mastracci, portfolio manager and president at KCM Wealth Management Inc., in Vancouver, said that banks were helped by easing trepidation over what problems may be still lurking in the financial sector.
"I think as investors look at more news being disseminated, as some of the financials have reported the potential losses that they're going to take, I guess they feel that we know more of the situation," Mastracci said.
"The more they know, they more they feel better about the prospects going forward, and I think there's some of that in there today."
On the downside, FirstService Corp <FSV.TO> tumbled C$2.77, or 12.2 percent, to C$19.96 after the property services firm swung to a fourth-quarter loss as it was stung by unfavorable market conditions.
The telecoms sector was the only group in negative territory, giving up 0.2 percent.
Shares of Lundin Mining <LUN.TO> added 68 Canadian cents, or 8.8 percent, to C$8.38 after it reported first-quarter profit rose, helped by rising copper and lead prices, as acquisitions increased production.
The Toronto benchmark has climbed more than 20 percent from the lows seen in January, when it dipped below the 12,000 mark amid worries over the health of the U.S. economy and troubles in the financial and credit markets.
Since then it has been spurred higher by red-hot commodities prices, and recent optimism that the worst of the credit problems have been seen. Analysts have also noted that the current round of corporate results generally have been better than had been feared.
"We're getting to the end of earnings season and we got through this without any terribly nasty surprises," said Rick Hutcheon, president and chief operating officer at RKH Investments.
"I think that the mood of investors is probably starting to gain a little traction, and that we're starting to feel a little more optimistic that perhaps the worst of the credit issues are beginning to recede."
Market volume was 441 million shares worth C$8.1 billion. Advancers outpaced decliners 985 to 655. The blue chip S&P/TSX 60 index <.TSE60> closed up 13.14 points, or 1.51 percent, at 884.73.
In New York, stocks were up as a pullback in oil prices calmed worries about inflation. The Dow Jones industrial average <.DJI> closed up 94.28 points, or 0.73 percent, at 12,992.66, and the Nasdaq Composite Index <.IXIC> rose 37.03 points, or 1.48 percent, to 2,533.73. ($1=$1.00 Canadian) (Editing by Peter Galloway) ((leah.schnurr@thomsonreuters.com; +1 416 941 8056; Reuters Messaging: leah.schnurr.reuters.net@reuters.com))
Keywords: MARKETS CANADA STOCKS
UPDATE 5-Senators reach accord on US housing rescue-sources
Reuters: [2008-05-15 23:26:00]
(Recasts with sources on deal, Dodd comments, background)
By Patrick Rucker and Kevin Drawbaugh
WASHINGTON, May 15 (Reuters) - Leaders of the U.S. Senate Banking Committee have reached a deal on a broad housing rescue plan in which Fannie Mae <FNM.N> and Freddie Mac <FRE.N> would provide funds to support a federal mortgage insurance fund, two industry sources said on Thursday.
Committee Chairman Christopher Dodd, a Connecticut Democrat, said an accord had not yet been finalized, but he told reporters after a meeting of the panel, "We're getting pretty close to it ... We're down to a few issues."
Funding for the $300-billion mortgage insurance fund, to be run by the Federal Housing Administration (FHA), proved to be one of the biggest stumbling blocks during talks all week between Dodd and Sen. Richard Shelby, the committee's top Republican.
Developing a mechanism to fund the program was seen as key to getting the rescue plan out of the banking committee and to the Senate floor for final approval, although that could still be a distant prospect. Aides said Senate leaders are not yet engaged in the housing package debate.
Dodd and Shelby have also agreed on language to create a new regulator for Fannie Mae and Freddie Mac, the lobbyists said.
The Dodd-Shelby pact on financing the FHA mortgage insurance fund would see Fannie Mae and Freddie Mac direct money from a new affordable housing fund to the government's largest homebuyer aid program.
The GSEs would send 100 percent of their contributions to backstop the insurance program in its first year, 75 percent in the second year and 50 percent in the third, the sources said.
The formula was crafted by Sen. Jack Reed, Democrat from Rhode Island, to satisfy Shelby, who objected to any taxpayer subsidy for the rescue plan, lobbyists said.
After temporarily adjourning a late afternoon banking committee meeting on the legislation and pledging to reconvene later in the evening, Dodd said, "We're in pretty good shape. Let's see what happens over the next few hours."
The White House has threatened to veto a similar rescue package passed last week by the House of Representatives. But the Bush administration has left open the door to discussions.
White House spokesman Scott Stanzel on Thursday said, "We're not commenting on any discussions we may or may not be having. If a bill comes to the president's desk it should meet the principles he has outlined."
Administration officials have said President George W. Bush's priorities are to retool the FHA with a system that sees riskier borrowers pay a higher mortgage insurance premium and reforming Fannie Mae and Freddie Mac oversight.
Both the Senate and House packages contain approaches to meeting those White House's goals. But both packages also propose setting up the FHA mortgage insurance fund, an idea that the administration dislikes.
The Congressional Budget Office has said that the FHA mortgage insurance plan would cost up to $2.7 billion. That would pay for expanding the FHA so it can help arrange lower-cost refinancing for as many as 500,000 homeowners whose homes have lost value since they took out their mortgages.
Shelby, of Alabama, has insisted that taxpayer money not be used to finance the FHA insurance program. He was not present at the Thursday afternoon committee meeting.
"We believe that we have an agreement in concept," said Shelby spokesman, Jonathan Graffeo. "We are now in the process of seeing whether that concept can be translated into legislative language that we can agree on."
Since last spring, the nation's mortgage market has been shaken by sinking home values that have erased billions of dollars of investor wealth. An estimated two million foreclosures are forecast for this year.
In March, the Federal Reserve put billions of dollars on the line to facilitate the takeover of Wall Street investment firm Bear Stearns Cos Inc <BSC.N>, which was near collapse.
Democrats have criticized policy-makers for being too eager to bail out investors, yet reluctant to aid struggling homeowners.
Last week, the House approved its own version of legislation to set up the $300 billion fund, adding billions more in homeowner aid to stabilize the market.
House Financial Services Committee Chairman Barney Frank, who sponsored the House bill, said on Thursday he saw some chance a deal could be reached.
"I wouldn't say I was optimistic, but I think it has a reasonable chance," the Massachusetts Democrat said. (Reporting by Patrick Rucker and Kevin Drawbaugh) ((patrick.rucker@thomsonreuters.com; +1-202-310-5474; Reuters Messaging: patrick.rucker.reuters.com@reuters.net)) Keywords: USA HOUSING/CONGRESS
. Keywords: USA HOUSING/CONGRESS
Mexico bonds gain as price worries ebb; stocks up
Reuters: [2008-05-15 23:21:00]
(Recasts, adds details and closing prices)
* Bond prices gain as inflation fears recede
* Tortilla price hike may be tamer than feared
MEXICO CITY, May 15 (Reuters) - Mexican bond prices rose on Thursday, mostly recovering from recent losses as investors worried less about the impact on inflation from a forecast that corn tortilla prices would rise, while stocks rose.
The government's benchmark 10-year peso bond <MX10YT=RR> rose 0.395 of a point in price to bid 98.058, pushing its yield down 6 basis points to 8.04 percent.
The benchmark IPC stock index <.MXX> gained 0.66 percent to 31,542.97 points, while the peso <MXN=> <MEX01> firmed 0.11 percent at the official central bank close to 10.476 per dollar.
Bond investors fear accelerating inflation could push the central bank to raise interest rates this year.
Worries were further stoked after producers of corn flour tortillas on Wednesday said they will soon raise prices for the Mexican staple.
Some media reports said tortilla prices, eaten for almost every Mexican meal, could rise by as much as 40 percent citing a small tortilla-maker group.
The news spooked bond investors, who dumped long-term bonds on Wednesday, pushing the yield on the 10-year bond up 7 basis points. But yields edged down on Thursday as investors questioned how big the increase could be and when it could hit.
"There has been a knee-jerk reaction to these tortilla prices," said Siobhan Morden a local market strategist at ABN AMRO in New York.
Morden added that it seemed likely that the government would be able to structure a new pact with producers to keep tortilla prices down, as it did in early 2007 and renewed several times in the last year.
But many investors were remaining cautious ahead of the central bank's monthly policy review, set for Friday at 9 a.m. (1400 GMT).
While analysts unanimously ruled out any change on Friday in the bank's overnight rate from levels of 7.50 percent, according to a Reuters poll, many are expecting the bank to introduce a tightening bias in tomorrow's statement.
In currency trading, traders said investors were exercising caution ahead of the central bank's monthly review on Friday. IXE brokerage said in a note that the peso could strengthen to around 10.43 per dollar, should the central bank introduce a more hawkish tone to its statement.
In stock trading, shares of miner Grupo Mexico <GMEXICOB.MX>, one of the world's largest copper producers, gained 3.13 percent to 79.20 pesos as copper prices rose nearly 2 percent in New York.
Shares of Cemex <CMXCPO.MX>, the top supplier of cement in the United States, gained 1.64 percent to 30.96 pesos. Its New York traded shares added 2.32 percent to $29.57.
Among losing stocks, America Movil <AMXL.MX>, Latin America's biggest cell phone operator, shed 1.14 percent to 30.41 pesos while its New York traded shares lost 0.43 percent to $58.25. (Reporting by Michael O'Boyle) ((michael.oboyle@reuters.com; +5255-5282-7160; Reuters Messaging: jason.lange.reuters.com@reuters.net)) Keywords: MARKETS MEXICO/
UPDATE 2-Toronto stocks pulled sharply higher by resources
Reuters: [2008-05-15 23:04:00]
(Updates with official closing numbers, adds details)
*Index closes at record high
*Resource and financial sectors rally
TORONTO, May 15 (Reuters) - The Toronto Stock Exchange's main index popped up more than 1 percent on Thursday, propelled further into record high territory by strong resource and financial shares.
Inmet Mining <IMN.TO> was the biggest net gainer on the day, rising C$6.25, or 9.3 percent, to C$73.75. Fertilizer company Potash Corp of Saskatchewan <POT.TO> was also among the leaders, finishing up C$5.28, or 2.7 percent, at C$204.50.
Gold producers also jumped, benefiting from rising gold prices. Agnico-Eagle Mines <AEM.TO> was up C$3.38, or 5.3 percent, at C$67.29, while the subindex gained 3.6 percent.
The S&P/TSX composite index <.GSPTSE> closed up 201.75 points, or 1.38 percent, at 14,828.06 with all but one of its 10 main sectors moving higher.
The surge helped the benchmark climb further into record territory, continuing the week's trend after it broke last summer's record high on Monday.
The financials sector, the biggest group on the index by weight, rose 1.6 percent, with Toronto-Dominion Bank <TD.TO> rising 94 Canadian cents, or 1.4 percent, to C$68.51, and Canadian Imperial Bank of Commerce <CM.TO> up 83 Canadian cents, or 1.1 percent, at C$74.84.
On the downside, FirstService Corp <FSV.TO> tumbled C$2.77, or 12.2 percent, to C$19.96 after the property services firm swung to a fourth-quarter loss as it was stung by unfavorable market conditions.
The telecoms sector was the only group in negative territory, giving up 0.2 percent. ($1=$1.00 Canadian) (Reporting by Leah Schnurr; Editing by Peter Galloway) ((leah.schnurr@thomsonreuters.com; +1 416 941 8056; Reuters Messaging: leah.schnurr.reuters.net@reuters.com))
Keywords: MARKETS CANADA STOCKS
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Keywords: MARKETS CANADA STOCKS
US CORP BONDS-Market stronger, new debt sales continue
Reuters: [2008-05-15 22:57:00]
NEW YORK, May 15 (Reuters) - The U.S. corporate credit
markets rallied on Thursday, while companies including HBOS Plc
<HBOS.L> and NiSource Finance Corp tapped the new issue
market.
The benchmark investment grade credit derivative index
tightened around 5.5 basis points to 90 basis points, its
tightest level in more than a week.
The rally was in line with a higher stock market, which was
buoyed by a pullback in crude oil. Healthy demand for new bond
issues also supported the market.
"There are a lot of new deals out there," said Mirko
Mikelic, senior portfolio manager at Fifth Third Asset
Management in Grand Rapids, Michigan.
New debt sales have been pricing more favorably than in
previous months, indicating better demand for new debt, he
said. "A lot of people are putting cash to work, the cash
market has moderately improved,"
HBOS, Britain's biggest mortgage lender, on Thursday sold
$2.0 billion in debt in the 144a private placement market, said
market sources.
NiSource Finance, a unit of electric utility NiSource Inc
<NI.N>, also sold $700 million in debt.
In the high yield market, Oklahoma City-based oil and
natural gas company SandRidge Energy Inc <SD.N> sold $750
million of 10-year senior notes in the 144a private placement
market. The size of the deal was increased from the originally
planned $500 million.
Financials dominated secondary trading with JPMorgan Chase
& Co's <JPM.N> 7.9 percent bond due 2018 the most actively
traded, according to MarketAxess.
Residential Capital's 8.375 percent bond due 2010 slipped
in jumpy trade. ResCap is offering to exchange the debt for new
bonds with a later maturity. The deadline for the offer will
expire on Friday.
The bond fell to 49 cents on the dollar, from 49.5 cents at
Wednesday's close, according to MarketAxess.
(Reporting by Karen Brettell and Anastasija Johnson; Editing
by Leslie Adler)
((karen.brettell@thomsonreuters.com; +1 646 223 6274; Reuters
Messaging: karen.brettell.reuters.com@reuters.net ))
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