Source: The Canadian Press

The Toronto stock market racked up a solid gain Tuesday amid rising commodity prices after aluminum giant Alcoa Inc. encouraged investors with an earnings report that beat expectations and added a positive outlook.

The S&P/TSX composite index gained 107.08 points to 11,672.84, while the TSX Venture Exchange was 13.98 points higher at 1,384.11.

Alcoa kicked off the second-quarter earnings season after the market close Monday and said that its profits came in at 13 cents a share, which beat analyst estimates by a penny. Revenue rose to US$5.2 billion, also above estimates.

Alcoa also said global consumption of aluminum will grow this year by more than it had forecast just three months ago and its shares ran ahead 13 cents to US$11.

“Alcoa’s earnings were very, very decent, definitely beat expectations although expectations have been dramatically lowered over the previous couple of months,” said Kathryn Delgreco, investment adviser at TD Waterhouse.

“The guidance was the key — they’re looking for aluminum consumption to increase by 10 to 12% in the coming year so that was very, very positive.”

The Canadian dollar moved up 0.35 of a cent to 96.74 cents US amid a report from Statistics Canada that the country’s trade deficit hit $503 million in May, up from $330 million in April.

The base metals sector improved by 3.3 cent with the September copper contract up a penny at $3.02. Teck Resources (TSX:TCK.B) advanced 46 cents to C$34.89 while Quadra FNX Mining (TSX:QUX) was up 54 cents at C$11.15.

Ivanhoe Mines Ltd. (TSX:IVN) said it has notified its joint-venture partner Rio Tinto of its plan to terminate a covenant that restricted its ability to issue shares to strategic investors. Andrew Harding, chief executive of Rio Tinto’s copper division, has resigned from Ivanhoe’s board of directors. Ivanhoe shares jumped $2.14, or 14.33%, to $17.07.

The tech sector was up 2.47% ahead of an earnings report from Intel. After the close, the American chip giant reported that quarterly earnings were 51 cents US a share, much higher than the 43 cents that analysts expected. Revenue also beat expectations, coming in at US$10.88 billion.

Research In Motion (TSX:RIM) gained $1.70 to $57.53.

Oil prices climbed back above US$77 a barrel as the positive start to the earnings season boosted confidence in the U.S. economy. The TSX energy sector rose almost 1% as the August crude contract on the New York Mercantile Exchange ran up $2.20 to US$77.15 a barrel.

Prices also got a lift from a report from the International Energy Agency, which predicted that oil demand would rise next year on economic growth in developing countries. It said that global daily oil demand should rise by 1.3 million barrels to 87.8 million barrels a day in 2011, an increase of 1.6% over 2010.

Encana spinoff Cenovus Energy (TSX:CVE) rose 81 cents to C$30.37 while Imperial Oil (TSX:IMO) climbed 64 cents to $39.94.

Meanwhile, gold stocks drifted lower even as the August gold contract on the Nymex rose $14.80 to US$1,213.50 an ounce. Barrick Gold Corp. (TSX:ABX) faded 60 cents to C$44.60.

Financials were also supportive with Scotiabank (TSX:BNS) ahead $1.40 to $52 while TD Bank (TSX:TD) advanced 74 cents to $72.55.

New York’s Dow Jones industrials jumped 146.75 points to 10,363.02, while the Nasdaq composite index climbed 43.67 points to 2,242.30 ahead of the Intel report. The S&P 500 index rose 16.59 points to 1,095.34.

Some of the optimism in the markets was dampened by the downgrade of Portugal by Moody’s Investor Services. The agency cut its rating on Portugal by two notches to A1 amid concerns over the country’s financial strength over the medium term in light of declining growth prospects.

In corporate news, Canwest’s newspaper division — home to the National Post and other dailies — has confirmed Postmedia Network Canada Corp. as its new owner.

Canwest says its newspaper subsidiary has successfully emerged from creditor protection under the ownership of Postmedia, the company headed by National Post chief executive Paul Godfrey. Postmedia says it plans to apply for a listing on the Toronto Stock Exchange, though an application hasn’t been filed yet.

One of Canada’s largest pension fund managers still plans to vote against a plan by auto parts giant Magna International to pay founder Frank Stronach more than $1 billion to give up control of the company. The Ontario Teachers Pension Plan Board says the payments to Stronach are excessive and unfair to the company’s other shareholders. Magna shares were up $2.90 at $73.87.

Convenience store operator Alimentation Couche-Tard reported fourth-quarter profit of US$68.8 million as it benefited from higher margins on fuel sold at its retail outlets and proceeds from the opportunistic sale of stock in Casey’s General Stores. Couche-Tard has been trying to acquire Casey’s. The Montreal-area company’s stock rose 64 cents to $20.50.

IE