Toronto stock market climbs as gold and energy stocks rise; Wall street falls

TORONTO – The Toronto stock market started the week with a moderate gain Monday, buoyed by a rise in climbing gold and energy prices.

The S&P/TSX index jumped 62.56 points at 12,860.35, as stocks in companies that deal in gold, metals and oil led advancers on the commodity-heavy weighted exchange.

It was a contrast to Wall Street where all major indexes were down. The Dow Jones industrial fell 123.47 points at 16,516.50. The Nasdaq composite dipped 32.52 points at 4,557.95 while the broader S&P 500 composite index lost 15.82 points to 1,932.23.

Andrew Pyle, a senior wealth adviser at Scotia Wealth Management, says investors fled to bullion because there was little momentum in the U.S. markets and an overall faltering confidence that the U.S. dollar will gain very much in value.

“Because of that, gold seems like an attractive play, an attractive investment,” he said.

The TSX gold sector was the biggest gainer, adding three per cent.

The April contract for bullion climbed $14 at US$1,234.40 an ounce, a price Pyle called a “bit overvalued” in the near term.

“Gold seems to have run into a ceiling after crossing through $1,200 and so near term, gold might look overvalued,” he said.

“Over the medium term, assuming the U.S. dollar does cool off, then I think gold could continue to move higher — whether we get up to $1,400, that remains to be seen. (But) there is definitely room for gold to move higher.”

Bullion prices have climbed more than 10 per cent this month.

There was also a pop in energy stocks, which gained two per cent on the TSX. The April contract for benchmark crude oil climbed 97 cents to US$33.75 a barrel.

In corporate news, shares in Valeant Pharmaceuticals pushed the healthcare sector to be the biggest loser on the TSX, pulling back nearly four per cent. The Laval, Que.-based drugmaker is currently under investigation by the U.S. Securities and Exchange Commission in a previously undisclosed probe.

On Monday, it announced it was delaying its financial results upon the return of its CEO Michael Pearson, who was away for nine weeks recovering from pneumonia and unspecified complications. Its shares tanked to $94.49 at the close, down nearly 14 per cent or $15.34.

Meanwhile, the loonie declined 0.10 of a U.S. cent to 73.90 cents US.

Pyle said the lack of positive movement from the Canadian dollar could be seen as a warning sign to investors.

“Maybe we’re in for some near-term correction in the value of the Canadian dollar,” he said.

In other commodities, April natural gas was down eight cents at US$1.71 per mmBtu, while May copper was unchanged at US$2.13 per pound.


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