TSX ends losing streak amid hopes for more stimulus for U.S. economy

The Canadian dollar was up 0.24 of a cent at 100.18 cents US after closing below parity with the greenback Tuesday for the first time since Feb. 10.

U.S. markets were positive after payroll company ADP reported that the American private sector created 216,000 jobs in February. That is pretty much in line with economists’ expectations for the U.S. non-farm payrolls report for the month, which comes out Friday.

The Dow Jones industrials advanced 78.18 points to 12,837.33.

The Nasdaq composite index gained 25.37 points to 2,935.69, while the S&P 500 index rose 9.27 points to 1,352.63.

Reports of further stimulus measures by the U.S. Federal Reserve also helped lift markets after the Wall Street Journal reported that the central bank is considering a new type of quantitative easing that will attempt to boost the economy without accelerating inflation.

The paper said that under the new approach, the Fed would print new money to buy long-term mortgage or Treasury bonds, but effectively tie up that money by borrowing it back for short periods at low rates.

The TSX plunged about 200 points on Tuesday, on top of a triple-digit slide Monday as investors nibbled at profits from a rally that started in early October and started to stall last week.

Slower growth prospects for China, and data showing the eurozone economy contracted in the fourth quarter of last year, raised worries about the strength of a global economy still trying to recover from the 2008 financial crisis and recession.

There were also worries about the latest deadline in Greece’s debt crisis. Hedge funds and banks that own Greek government debt have until Thursday night to exchange their bonds for new ones that are less valuable. If too few are willing, Greece might default, which would rattle the global financial system.

“I think the major selling pressure came on the back of the fact that China’s growth number wasn’t as strong as everybody thought, but I don’t think it should be viewed negatively — revising growth from eight per cent to 7.5% is not a big deal,” said Sid Mokhtari, market technician at CIBC World Markets.

“I think the catalyst that forced it was almost everyone was looking for some sort of a correction, everyone was assuming that it was extended, overbought and thought it’s reasonable to take some profit and one of them was because of the Greek situation.”

On the TSX, the energy sector was up 0.9% as the April crude contract on the New York Mercantile Exchange rose $1.46 to US$106.16 a barrel after losing US$2 Tuesday. Suncor Energy (TSX:SU) gained 40 cents to C$33.72 while Talisman Energy (TSX:TLM) was ahead 26 cents to $13.25.

Mining stocks moved into positive territory as metal and bullion prices reversed some of Tuesday’s losses.

The base metals sector was up 0.52% while copper was three cents higher at $3.77 a pound after demand concerns sent the metal tumbling 12 cents on Tuesday.

The sector was largely dragged down by copper miner First Quantum Minerals Ltd. (TSX:FM). Its shares fell 46 cents to C$20.14 after saying after the market close Tuesday that net quarterly earnings were $76 million, or 16 cents per share, compared with $454.7 million a year ago. Earnings were affected by lower realized copper prices, lower sales volumes and inflationary cost pressures.

Elsewhere in the sector, Lundin Mining (TSX:LUN) gained 17 cents to $4.68 while HudBay Minerals (TSX:HBM) ran up 28 cents to $11.19.

The gold sector was up about 0.2% as the April gold contract in New York rose $11.80 to US$1,683.90 an ounce. Kinross Gold Corp. (TSX:K) improved by 11 cents to C$10.67.

Worries about Greece helped send the financial sector down 0.28% as Royal Bank (TSX:RY) dropped 36 cents to $55.79.

Shares in Laurentian Bank (TSX:LB) were off 31 cents to $44.74 after it said first-quarter profits dropped 16% to $31 million as it booked acquisition costs related to its purchase of MRS Companies.

Elsewhere on the corporate front, shares in Wi-LAN (TSX:WIN) (Nasdaq:WILN) shot up 18 cents to $5.08 on the Toronto exchange as the patent-licensing company delivered stronger quarterly results but also scaled back its expectations for the first quarter. Wi-LAN also announced it was rising its dividend 20% to three cents per share.

Air Canada’s (TSX:AC.B) largest union has served notice that it intends to begin a strike at 12:01 a.m. ET on March 12 unless a new contract is signed by then. The International Association of Machinists and Aerospace Workers represents about 8,600 mechanics, baggage handlers and cargo agents. The workers had rejected a tentative contract settlement signed in February. Air Canada shares slipped four cents to 93 cents.

Apple has confirmed that its new iPad model features a sharper screen and a faster processor. Prices aren’t changing from the previous models. They will start at US$499. Versions capable of accessing cellular networks will cost $629 to $829. The new iPad model will go on sale March 16 in the U.S. and Apple shares gained 43 cents to US$530.69.

Meanwhile, Research in Motion Ltd. (TSX:RIM) shares lost 26 cents to C$12.89. BMO capital markets analyst Tim Long says RIM’s earnings are likely to fall short of expectations in the coming quarters as the BlackBerry maker moves towards the launch of its new devices late in the year. He cut his price target for RIM to US$12 for its U.S. shares (NASDAQ:RIMM), which is $3 lower than his previous estimate.