Toronto stock market advances after string of losses on Greek default worries

TORONTO – The Toronto stock market snapped a three-session losing streak Monday even as the possibility of a Greek default continued to cast a shadow over markets.

The S&P/TSX composite index gained 67.75 points to 12,857.7 with only the energy and tech sectors negative while the TSX Venture Exchange was 15.66 points lower to 1,882.27.

The Canadian dollar was unchanged from Friday at 102.02 cents US.

The greenback gained against other currencies, particularly the euro, as risk-averse traders bought into the American currency after a weekend meeting of eurozone finance ministers failed to agree on an immediate release of bailout funds to Greece.

Though the finance ministers of the 17 countries that use the euro agreed to hand over the next bailout instalment worth euro 12 billion (US$17 billion), they said they would only do that if the Greek Parliament backed further austerity measures.

But there is great uncertainty as to whether the Greek government can push through those new measures.

The financials sector was up 0.83 per cent with Manulife Financial (TSX:MFC) ahead 39 cents to $15.95.

Royal Bank (TSX:RY) shares were up 21 cents to $54.54 as it said it faces a $1.6-billion loss as it sheds its U.S. retail banking operations.

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Royal Bank is selling the U.S. assets to the PNC Financial Services Group Inc. for about US$3.62 billion. The loss includes an estimated $1.3 billion writeoff of the retail operations. Royal Bank will continue to operate both its U.S. wealth management and capital markets operations and its shares rose 21 cents to $54.54.

The telecom sector was up 1.63 per cent as the CRTC started six days of hearings into the ownership of media companies by national broadcasters. Rogers Communications (TSX:RCI.B) gained 62 cents to $35.97 while BCE Inc. (TSX:BCE) advanced 91 cents to $38.12.

The industrials sector rose 0.82 per cent with Canadian National Railways (TSX:CNR) ahead 75 cents to $74.16.

Bombardier Aerospace (TSX:BBD.B) has signed an unnamed “major network carrier” to take delivery of 10 of its new CSeries aircraft in a deal valued at $616 million. Its shares slipped six cents to $6.92.

The gold sector turned higher as nervous investors pushed bullion higher for a fifth day with the August gold contract in New York up $2.90 at US$1,542 an ounce. Goldcorp Inc. (TSX:G) ran up $1.04 to C$46.44.

Oil closed slightly higher with the July crude contract on the New York Mercantile Exchange up 25 cents at US$93.26 a barrel after a rising U.S. dollar earlier pushed oil as low as US$91.14. A stronger greenback usually helps depress oil prices, which are denominated in dollars, as it makes oil more expensive for holders of other currencies.

The energy sector backed off 0.38 per cent with Suncor Energy (TSX:SU) down 21 cents to C$36.96 and Imperial Oil (TSX:IMO) gave back 27 cents to $43.85.

The base metals sector was ahead 0.16 per cent as metal prices also retreated, with the July copper contract on the Nymex down three cents at US$4.07 a pound.

But the group was held back by sector heavyweight Teck Resources Ltd. (TSX:TCK.B). Its shares fell 43 cents to C$43.23 as the company reduced its coal production guidance for the second quarter and said unit mining costs would be greater as a result of higher labour and other expenses. Teck now expects coal sales in the second quarter at the low end of its previously announced guidance range of 5.5 million to six million tonnes as a result of the March 11 earthquake and tsunami in Japan.

Elsewhere in the sector, Quadra FNX Mining (TSX:QUX) gained 26 cents to $13.16.

Research In Motion Ltd. (TSX:RIM) continued to be a drag on the TSX following a disappointing earnings forecast delivered late last week. Its shares were down $1.83 or 6.72 per cent to $25.41 after plunging about 20 per cent Friday.

The positive performance on the TSX came after worries about Europe’s debt problems and the possibility of a Greek default in particular, along with slowing global economic conditions, pushed the TSX lower for a third week in a row, losing 2.2 per cent.

Greece has been at the centre of Europe’s debt worries, but other countries are also facing troubles. Moody’s warned on Friday that it may cut Italy’s credit rating because of its mounting debt and sluggish growth prospects.

In New York, the Dow Jones industrial average gained 76.02 points to 12,080.38.

The Nasdaq composite index rose 13.18 points to 2,629.66 while the S&P 500 index climbed 6.86 points to 1,278.36.

In other corporate news, beverage and specialty food maker Lassonde Industries Inc. (TSX:LAS.A) expects to have greater access to the large U.S. market with its US$390 million acquisition of New Jersey-based juice producer Clement Pappas and Co. Inc. Lassonde shares rose $1.35 to $70.35.

Boston-based Atlantic Power Corp. (TSX:ATP) announced Monday that it plans to acquire Capital Power Income L.P. (TSX:CPA.UN) in a cash and stock deal that values the company at some $1.1 billion. Atlantic Power shares dipped seven cents to $14.89 while Capital Power units gained 65 cents to $19.28.

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