U.S. and Canadian stock markets opened higher, with the materials sector of the TSX seeing some of the biggest gains as metal prices advanced. Gold and copper were both up more than 1 per cent and silver 2 percent, thanks in large part to a weaker U.S. dollar against major currencies.
In early trading, the S&P/TSX composite index was up 81 points, or 0.6 per cent, at 12,302; the S&P 500 was up 4 points, or 0.2 per cent, at 1,586; and the Dow Jones industrial average was up 23 points, or 0.1 per cent at 14,733. The June gold futures contract in New York was up 1.1 per cent at $1,470.40 (U.S.) per ounce, while silver was up 2 per cent at $24.27 an ounce and copper was up 1.1 per cent at $3.22 per pound.
The dollar index, which pits the greenback against a basket of six other major currencies, was down about 0.4 per cent to 82.183 after hitting the lowest level since April 17. Bids in the U.S. currency have weakened in recent sessions amid signals the American economy is still showing only very modest growth, a concern underlined Friday when gross domestic product figures failed to meet economists' expectations. A weaker U.S. dollar makes commodities cheaper to purchase in foreign currencies.
The plunge in gold prices earlier this month ignited a surge in physical buying, several reports suggest, which has aided the metal in its recovery. Meanwhile, the majority of market participants believe gold will continue to see a price recovery this week, according to the latest Kitco News survey, while HSBC on Friday said bullion has been oversold. Also last week, Goldman Sachs withdrew its recommendation for investors to short gold. In early trading, Barrick Gold was up 1.8 per cent and Goldcorp 1.3 per cent.
Markets received some supportive news this morning on the data front, as the U.S. Commerce Department reported personal spending growth of 0.2 per cent in March, a little better than the flat reading that was expected - suggesting that consumers are continuing to spend. Personal income growth rose 0.2 per cent, below expectations for about 0.4 per cent. The U.S. National Association of Realtors, meanwhile, reported that U.S. pending home sales in March rose 7 per cent from a year ago, modestly pending forecasts of 6.1 per cent growth.
The Chinese and Japanese markets were closed overnight for a holiday. In Europe, the Italian stock market is leading gains, up 1.4 per cent. Investors there were encouraged by a government debt auction that saw borrowing costs for Italy fall to multi-year lows. Ten-year bonds were auctioned at an average yield of 3.94 per cent, down from 4.66 per cent at an auction last month, and the lowest yield since October 2010. Italy successfully formed a government this weekend led by Prime Minister Enrico Letta after inconclusive elections earlier this year.
On a negative note, however, an economic morale indicator for the euro zone today fell for a second straight month to below economists' forecasts, highlighting the region's difficult road out of recession. The European Central Bank could cut interest rates as early as this week.
Here's a look at some stocks moving on news this morning:
Research In Motion Ltd. shares opened up 2.8 per cent, as Jefferies analyst Peter Misek issued a research note saying the Q10 smartphone launch in the U.K. went well and the the Z10 continues to hold its own in key markets.
Two hedge funds are buying into troubled retailer J.C. Penney, according to the New York Post. It said one of the funds, worth more than $10-billion (U.S.), scooped up a stake of between 5 per cent and 10 per cent. Shares in J.C. Penney are up 3.2 per cent.
Valeant Pharmaceuticas International Inc. and Actavis Inc. of New Jersey are reportedly at an impasse in talks to combine the two companies. Shares in Valeant are up 3 per cent at the open.
BHP Billiton Ltd. has agreed to sell its Pinto Valley copper mine and a railroad in Arizona to Capstone Mining Corp. for $650-million.