Market Update – November 4, 2008

Stocks on Bay Street surged today, led by a jump in gold stocks, as traders took in a fresh batch of corporate earnings. Oil and metals prices gained and the polls opened for the U.S. presidential election. The S&P/TSX composite index gained 395.32 points to 10,116.58.

In corporate news, TSX Group Inc. is cutting 10 percent of its workforce, 85 people, as the stock exchange operator’s integration of the Montreal derivatives market continues. Elsewhere, Gabriel Resources Ltd. reported a quarterly loss of $2.8 million, as its Rosia Montana gold project remains entangled in politics and regulation. The company is hopeful about a new Romanian government after elections Nov. 30.

Lastly, Quadra Mining said on Tuesday its third-quarter profit fell 59 percent as weaker copper prices eroded revenue and prompted the Canadian producer to halt its two development projects and suspend production forecasts beyond 2008. Net income was $20.1 million, or 30 cents a share, down from $48.8 million, or 86 cents a share, in the year-before period.

 

In the U.S., stocks rallied Tuesday as millions of Americans cast ballots to determine whether Republican John McCain or Democrat Barack Obama wins the presidency, with polls favoring the latter to replace George W. Bush in the White House. The Dow Jones Industrial Average gained 305.45 points, or 3.3 percent, to 9625.28, and the S&P 500 was up 39.45 points, or 4.1 percent, to 1005.75. The Nasdaq tacked on 53.79 points, or 3.1 percent, to 1780.12.

A series of solid corporate earnings results were bolstering investor enthusiasm. Following Monday’s close, credit-card company MasterCard took a net loss on charges related to its settlement of a legal scuffle with Discover Financial Services. Excluding the charge, however, MasterCard’s earnings trumped the Street’s forecasts.

Energy company Anadarko Petroleum reported that third-quarter profit climbed year over year and beat analyst estimates. In the technology sector, analysts say a revised search deal with Google Inc. will likely limit the upside for Yahoo Inc. and could push the Web portal back to considering a merger with Microsoft Corp.

On the data front, U.S. and foreign businesses sharply cut back their demand for capital equipment for the second straight month in September, the Commerce Department reported Tuesday. Factory orders fell 2.5 percent in September, much weaker than the 0.2 percent fall expected by economists.

The Canadian dollar, meanwhile, is trading up 2.14 cent at 86.86 cents US. Oil futures climbed sharply to trade above $70 a barrel, with the contract for December delivery rising $6.62, or 10.4 percent, to finish at $70.53 a barrel.