TSX May Pause Wednesday Morning After Big RallyToronto stocks may take a breather Wednesday morning after rallying smartly in the previous session. Also, easing energy prices, disappointing economic data from south of the border and profit taking at higher levels might curb further gains during the day.
Meanwhile, worries over the European debt market resurfaced after the European Commission denied a newspaper report that the EU, the IMF and the U.S. Treasury were considering a liquidity plan for Spain.
On Tuesday, the S&P/TSX Composite Index rallied 240.19 points or 2.06% to 11,907.54.
The price of crude oil was down $0.82 to $76.12 a barrel after the API yesterday revealed surprise build in U.S. crude inventories. Oil advanced to a monthly high of above $77 a barrel intraday Tuesday amid recovering euro and equities.
The price of gold edged up $3.80 to $1,238.20 an ounce after gaining nearly $10 in the previous session.
In corporate news, Serabi Mining Plc has agreed to issue to Canadian gold mining company Eldorado Gold Corp. 120 million new ordinary shares of 0.5 pence each in the company at a price per ordinary share of 3.0 pence. Serabi shares soared nearly 80% in Wednesday morning trade.
Gold and silver explorer Starcore International Mines reported a flat third quarter net loss of C$0.01 per share, compared to a net loss of C$0.01 per share in the year-ago quarter.
The Ontario Securities Commission challenged the proposal by auto-parts company Magna International to eliminate its dual class share structure. The proposal, if implemented, would benefit the founder - Frank Stronach - approximately $900 million.
Transportation equipments and systems maker Bombardier Inc. said its unit, Bombardier Transportation, has won a tender from the Swiss Railways, SBB, to supply new double-deck trains. The contract for 59 Bombardier Twindexx trains has a total value of around $1.6 billion.
Food and drug store company Loblaw Companies has agreed to issue $350 million principal amount of Medium Term Notes, mainly used to pre-fund the company's $350 million of debts maturing in January 2011.
In economic news from the U.S., Commerce Department said housing starts plummeted 10% to a seasonally adjusted annual rate of 593,000, from a downwardly revised 659,000 in April. Economists were expecting 653,000 housing starts on an annualized basis. Meanwhile, building permits slumped 5.9% to an annual rate of 574,000 in May. Economists were expecting for 625,000 building permits in May.In another report, the U.S. Department of Labor revealed that producer prices fell 0.3% in May, belying economists expectations for a decline of 0.5%.
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