TSX closes up 467 points as markets shake off some of Monday's panic
Toronto's benchmark stock index gained more than 467 points Tuesday, suggesting that some people thought Monday's record 840.93-point drop was overdone.
Although Washington was still deadlocked on a financial bailout plan, New York stocks bounced back too, with the Dow Jones industrial average regaining more than 485 of the 777.68 points it lost the day before.
Traders John Porcelli Jr., left, and Peter Edelson, right, work on the floor of the New York Stock Exchange, on Tuesday. Stocks staged a partial rebound after their biggest selloff in years.(Richard Drew/Associated Press)And a barrel of oil was worth more than $100 US again.
Light, sweet crude for November delivery fetched as much as $102.46 US a barrel in late New York trading, solidly above Monday's close of $96.37 but far below a record price of $147.27 in July. Oil plunged $10.52 Monday on fears that the failed U.S. assistance package would lead to a worldwide economic slowdown.
Toronto's S&P/TSX composite index closed up 467.83 points, or 4.15 per cent, at 11,752.9 after being ahead as much as 617 points during the day. Its Monday loss was a fraction of a point bigger than the old record set in 2000 during the collapse of Canada's tech-stock sweetheart, Nortel.
Nortel, once worth $124.50 a share, was one of Toronto's most actively traded stocks Tuesday. It closed unchanged at $2.34 after trading for as much as $2.60.
A current tech-stock favourite, BlackBerry maker Research In Motion, saw its share price rise $5.74, or 8.7 per cent, to $72.20 following two days of pounding after its strong financial results failed to meet even higher expectations. It lost a third of its market value Friday and Monday because of market uncertainty and the earnings disappointment.
Prices were up in almost all TSX sectors, especially among mining and energy stocks that stand to gain if the world's credit system recovers from its funk and economies do not tank.
Fording Canadian Coal Trust was up $8.15, or 10.3 per cent, at $87.27, and Teck Cominco was up $1.30, or 4.5 per cent, at $30.20. Fording's owners voted on Tuesday to accept Teck's $14-billion US takeover bid after Teck sealed a financing arrangement for it.
On the down side, Canadian Tire was off $2.39, or 4.3 per cent, to $53.60. Barrick Gold was off $1.47, or 3.6 per cent, at $38.97.
In New York, the Dow closed up 485.21 points, or 4.7 per cent, at 10,850.66, near its high for the day.
'Now what?' economist asks. 'Analysis eludes us.'Investors ran for the exits Monday after the U.S. House of Representatives failed to pass the bailout package, which would have aided ailing financial services companies, many of which have huge amounts of nearly worthless paper on their books and are seeking to avoid large writedowns.
"Now what?" asked Carl Weinberg, chief economist at High Frequency Economics. "Analysis eludes us. We have no prior experience to fall back on that might possibly help us frame the consequences of Congress's inaction on either the economy or financial markets."
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