Positive U.S. data helps push TSX higher amid mounting Greek uncertainty

The loonie improved from early lower levels amid positive U.S. data, up 0.26 of a cent at 100.35 cents US.

The Dow Jones industrial average jumped 123.13 points to 12,904.08 as the U.S. Labour Department reported that the number of people seeking unemployment benefits dropped 13,000 to a seasonally adjusted 348,000 last week, the lowest point in almost four years.

The Nasdaq composite index gained 44.02 points to 2,959.85 while the S&P 500 index was ahead 14.82 points to 1,358.05.

Investors were also encouraged by a closely followed index of manufacturing activity in the Philadelphia area. The Philadelphia Federal Reserve’s manufacturing index reached a four-month high of 10.2 in February in further evidence of the continued strength in the manufacturing sector.

“Stocks have moved higher on the news, providing a separation from the malaise we continue to see in European trading during the morning,” said ScotiaMcLeod investment adviser Andrew Pyle.

At the same time, investors are gradually reassessing their assumption that Greece will get a bailout worth €130 billion and an accompanying €100-billion debt writedown by private bondholders.

Greece needs the money to deal with a huge bond repayment March 20 in order to avoid default, which would likely send shockwaves through the global financial system.

Greece has been forced to meet a growing list of demands to qualify for the bailout money. These included finding a further €325 million in savings and a commitment in writing by the leaders of Greece’s coalition government that they will stick to those requirements even after an election scheduled for April.

On Wednesday evening, after a lengthy conference call between the 17 eurozone finance ministers, more hurdles were put in front of Greece. One involves the possibility of setting up an account, separate from Greece’s general budget, that would be dedicated to paying off the country’s massive debt.

“And that points to a lack of trust in the Greek government to stick to the austerity measures that they need to adhere to in order to get this bailout,” said Luciano Orengo, portfolio manager at Manulife Asset Management.

Also improving sentiment during the afternoon was a German newspaper report that the European Central Bank would swap its Greek bonds for newly issued ones. Die Welt said the new bonds are “likely further out in maturity, to give Greece some breathing room.”

The TSX gold sector was the leading advancer, up about two per cent as bullion shook off early losses to close up 30 cents to US$1,728.40 an ounce.

Barrick Gold Corp. (TSX:ABX) turned positive, rising 46 cents to C$48 as its adjusted net earnings grew 15% to US$1.17 billion or $1.17 a share in the fourth quarter on higher gold prices and copper sales. But the results still missed analyst expectations by 10 cents.

Agnico-Eagle Mines Ltd. (TSX:AEM) also shed early losses to advance $2.45 or 7.18% to $36.57 as it reported a quarterly net loss of $601.4 million or $3.53 per share for the fourth quarter of 2011. Average analyst estimates had been for a profit of 48 cents per diluted share, according to those surveyed by Thomson Reuters.

The TSX energy sector was up 1.34% as the U.S. economic reports pushed the March crude contract on the New York Mercantile Exchange ahead 51 cents to US$102.31 a barrel. Canadian Natural Resources (TSX:CNQ) rose 67 cents to $37.07.

Nexen Inc. (TSX:NXY) saw its profit cut by nearly 75% in the latest quarter to $43 million as the big international oil and gas producer booked charges on its books for future oilsands projects and low natural gas prices. But its shares added 77 cents to C$19.71.

Tech stocks were also supportive with Research In Motion Ltd. (TSX:RIM) ahead 53 cents to $15.32.

The base metals sector gained as the March copper contract recovered most early losses and closed down one cent to US$3.79 a pound. Teck Resources (TSX:TCK.B) advanced 90 cents to C$39.38.

The financials sector was also positive, up 0.55% as traders also weighed the possibility of downgrades involving some of the world’s biggest banks, including Canada’s Royal Bank (TSX:RY).

Moody’s Investors Service said it may lower the ratings of some of the world’s largest banks as well as those of some securities firms because their long-term prospects for profitability and growth are shrinking. Other banks under review for downgrades include Citigroup, Bank of America, Goldman Sachs, JPMorgan Chase and Morgan Stanley.

Royal Bank stock was off 10 cents at $53.36 while Scotiabank (TSX:BNS) climbed 75 cents to $53.62.

Elsewhere in the financial sector, insurance giant Sun Life Financial Inc.(TSX:SLF) reported that it lost $525 million in the latest quarter as the company took some big charges on its books, including the cost of shuttering its individual products business in the U.S. Canada’s No. 3 insurer lost 90 cents a share, reversing a net profit of $504 million or 84 cents a year earlier and its shares dipped one cent to $20.88.

In other earnings news, heavy truck and equipment dealer Finning International Inc. (TSX:FTT), the world’s biggest dealer in Caterpillar products, reported that fourth-quarter profit rose 27% to $71 million, while quarterly revenues hit a record $1.8 billion. Its shares ran up $1.40 to $28.15.

Beer maker Molson Coors (TSX:TPX.B) (NYSE:TAP) said fourth-quarter profits rose 58% to US$173.2 million, handily beating analysts expectations as net sales rose 12.2% to $937.3 million and volume was up 2.6%. Its shares were up $1.24 to US$45.10.