TSX closes higher amid positive U.S. data

The information technology sector, up 4.7%, led the main index higher with shares in Research In Motion Ltd. (TSX:RIM) up 2.9% or 27 cents to $9.44 a day ahead of its first-quarter earnings report.

The Canadian dollar shed 0.15 of a cent to 97.51 cents US, a day after ratings agency DBRS confirmed the top long- and short-term ratings for the Government of Canada debt. The fall came amid a rise in the U.S. dollar on positive economic data from south of the border.

The August crude contract moved up 85 cents to US$80.21 a barrel on the New York Mercantile Exchange. On the TSX, the energy sector, up 1.7% was one of the biggest gainers with shares in Suncor Energy (TSX:SU) up 15 cents to $27.88.

Crude is near eight-month lows, down from US$106 a barrel less than two months ago amid signs that economic growth and oil demand are slowing in the U.S., Europe and China.

The August gold contract rose $3.50 cents to US$1,578.40 an ounce, while the July copper contract inched up four cents to US$3.35 a pound.

Wall Street markets were up after some positive data from the important housing and manufacturing sectors.

The Dow Jones industrial average rose 92.34 points to 12,627.01 and the S&P 500 was up 11.86 points to 1,331.85, while the Nasdaq gained 21.26 points to 2,875.32.

Data from the U.S. Wednesday showed businesses placed more orders with U.S. factories for long-lasting manufactured goods in May. The increase suggests companies remain confident in the U.S. economy despite a weaker job market and a likely recession in Europe.

The Commerce Department said that orders for durable goods rose 1.1% in May after two months of declines.

Meanwhile, stats from the National Association of Realtors showed Americans signed more contracts to buy previously occupied homes in May, matching the fastest pace in two years. The increase suggests home sales will rise this summer and the modest housing recovery will continue.

The organization’s index of sales agreements increased to 101.1 last month from 95.5 in April. That matches March’s reading, the highest since April 2010, when a home-buying tax credit boosted sales.

Still, traders are reluctant to take on new risks in this volatile environment when so much uncertainty surrounds what will happen to the eurozone, especially ahead of the big EU meeting on Thursday, said Chris Kuflik, ScotiaMcLeod wealth adviser in Montreal.

“A lot of investors are frozen, sort of the deer in the headlight look because you’ve got ‘oh well this company’s doing well, but the economy’s not so great now’ … and the markets gyrate for absolutely no reason, it’s just on the fear or the positive news du jour.”

With German Chancellor Angela Merkel continuing to voice her opposition to the prospect of jointly issued eurobonds, investors doubt anything substantial will emerge at the two-day summit in Brussels that starts Thursday.

Many experts say eurobonds are the answer to the currency zone’s problems as they would help lower indebted countries’ borrowing costs, easing the risk they may need a bailout. But Germany is reluctant to expose itself to new potential costs and is concerned that eurobonds may ease the pressure on countries like Greece and Spain to reform their economies.

“Do I expect anything? Not really. I would be pleasantly surprised if they came up with a good longer term concrete solution, but until some people are willing to make the tough decisions unfortunately they continue to muddle on,” Kuflik said.

“There’s a lot bigger crisis and the thing is in the EU you’ve got all these different countries will all kinds of different economies that all have different agendas.”

The run-up to the summit is distinctly different to previous ones over the past two years when investors got ahead of themselves, anticipating game-changing conclusions, only to be disappointed. Though little is expected from the summit, some traders think the European Central Bank may take more aggressive action to ease the crisis and that has helped shore up stocks.

In Canadian corporate news, MacDonald, Dettwiler and Associates Ltd. of Vancouver (TSX:MDA) will pay US$875 million to acquire a California-based company that makes commercial communications satellites. MDA says the addition of Space Systems/Loral Inc. will give it a critical mass in the U.S. market and global opportunities for growth. Shares jumped 28% or $12.61 to $57.25.

And Westport Innovations Inc. (TSX:WPT) said it will provide General Motors with technology for natural gas engines. Westport stock gained $3.14 or more than nine per cent to $36.47.

AGF Management Limited (TSX:AGF.B) says its second-quarter profit fell to $23.8 million, or 25 cents per share, a decline of 30% from $33.9 million, or 35 cents per share, a year earlier. Shares dropped a cent at $11.05 but had dropped to $10.78 earlier in the session, the lowest in at least a year.

Canadian Pacific Railway (TSX:CP) says that retired oil executive Rick George has resigned as a director, the latest departure from a board that was transformed by a hard fought proxy battle led by the company’s largest shareholder. Shares fell 32 cents to $72.81.

Goldcorp Inc. (TSX:G) says an Ontario judge has dismissed Barrick Gold Corp.’s (TSX:ABX) claims that its acquisition of the El Morro project in Chile was illegal. Toronto’s Barrick, the world’s largest gold producer, claimed in the Ontario court that it had a deal in October 2009 to acquire a majority stake in the project from European miner Xstrata PLC. Goldcorp shares lost 16 cents to $38.38, while Barrick shares shed 27 cents to $37.56.