TSX higher despite worries over lack of detail in European debt plan

The Canadian dollar was down 0.06 of a cent to 100.82 cents US after closing above parity with the American currency Thursday for the first time since Sept. 20.

U.S. markets were little changed as the Dow Jones industrial index gained 22.56 points to 12,231.11. The Nasdaq composite index lost 1.48 points to 2,737.15 and the S&P 500 index was ahead 0.49 of a point to 1,285.08.

Global stock markets racked up solid advances Thursday after eurozone leaders unveiled a plan to cut Greece’s debt, increase the firepower of the continent’s bailout fund to C1 trillion euros and strengthen the region’s banks, partially so they can sustain deeper losses on Greek bonds.

“It provided the confidence that European leaders are actually taking it seriously and trying to find a way forward,” said Chris King, portfolio manager at Morgan, Meighen and Associates.

“At the end of the day, they are making progress but it’s not as easy as the Republicans and the Democrats (in the U.S.) coming to an agreement. There are so many moving parts.”

Despite the modest gain on the TSX, there are investor questions about the lack of detail in the plan.

There was concern after Italy saw its borrowing costs rise in a sale of €7.9 billion in sovereign debt. The interest rate demanded by investors to lend the Italian government 10-year money topped six per cent, surpassing the 5.86% rates paid a month ago.

Italy has seen its borrowing costs rise under pressure from Europe’s sovereign debt crisis. The European Central bank for weeks has been buying Italian bonds to keep rates at manageable levels.

Still, relief over the eurozone proposal pushed the TSX up 4.7% this week while the Dow industrials jumped 3.57%.

The gold sector was ahead about two per cent while December gold slipped 50 cents to US$1,747.20 an ounce. Goldcorp Inc. (TSX:G) improved by $1.83 to C$49.68 while Barrick Gold Corp. (TSX:ABX) rose $1.89 to $50.50.

The base metals sector turned positive, up 3.32 cent as metal prices came off the lows of the morning and December copper added one cent to US$3.71 on top of Thursday’s 20-cent jump. Teck Resources (TSX:TCK.B) moved up $1.15 to C$41.50 while Quadra FNX Mining (TSX:FNX) lost 19 cents to $12.

The tech sector was also positive after Mosaid Technologies Inc. (TSX:MSD) said its board supports a C$590-million offer from U.S. private equity firm Sterling Partners.

Sterling is offering $46 cash per Mosaid share, a bid that’s nearly 10% more than one from Mosaid’s rival Wi-LAN Inc. (TSX:WIN). Mosaid shares jumped $2.53 or 5.83% to $45.95.

The Wall Street Journal reported that Research In Motion (TSX:RIM) has set up a facility in Mumbai to help the Indian government carry out lawful surveillance of its BlackBerry services. The Waterloo, Ont., company gave India access to its consumer services, including its BlackBerry Messenger texting service in January after authorities raised security concerns, the newspaper said. However, RIM said it could not allow monitoring of its enterprise email and its shares added seven cents to US$ .

Oil prices were lower amid doubts that the plan to contain the debt crisis will help boost global economic growth.

The December crude contract on the New York Mercantile Exchange lost 64 cents to US$93.32 a barrel after running up almost $4 Thursday. The energy sector edged up 0.48% as Talisman Energy (TSX:TLM) gained 37 cents to C$14.88 while Cenovus Energy (TSX:CVE) lost 23 cents to $36.

Financials were the biggest weight, down 0.46% after racking up strong gains Thursday. Manulife Financial (TSX:MFC) lost 26 cents to $13.68.

It was a relatively light day for earnings news.

Wood panel maker Norbord Inc. (TSX:NBD) said its losses were US$1 million or two cents per share in the three months ended Oct. 1, an improvement from the $4 million loss handed in a year earlier. The company is still feeling the pressure of a depressed U.S. housing market. Its shares slipped a penny to $8.93.

And in the United States, appliance maker Whirlpool Corp. will cut 5,000 jobs, about 10% of its workforce in North America and Europe, as it faces soft demand and higher costs for materials.

Whirlpool also reduced its 2011 earnings outlook drastically and reported third-quarter results that missed expectations as net income more than doubled to $177 million while revenue rose two per cent to US$4.63 billion. Its shares tumbled 14.34% to US$51.80.

In other corporate news, ATS Automation Tooling Systems Inc. (TSX:ATA) shares was off seven cents to $6.28 after it said it is reducing workdays at Photowatt France, its struggling solar energy subsidiary, as demand weakens. The facility will operate at about one-third of its production capacity.