North American stock markets opened higher, as optimism is running high that the U.S. will be able to avoid the fiscal cliff of tax hikes and spending cuts set to take hold at the start of next year.
In early trading, the S&P/TSX index is up 72 points, or 0.5 per cent, at 12,212; the S&P 500 is up 7 points, or 0.4 per cent, at 1,416; and the Dow Jones industrial average is up 48 points, or 0.3 per cent, at 13,033.
Oil is having a particularly strong day, up $1.88, or 2.1 per cent, at $88.37 (U.S.) in New York, which is lifting shares of energy companies on the TSX. Gold, which tumbled sharply on Wednesday amid heavy fund liquidation, was up $7.10, or 0.4 per cent, at $1,723.
Research In Motion is once again a big focus today because of yet another analyst report. This time, it's the highly influential Goldman Sachs, which upgraded the stock to a "buy" and raised its price target to $16 from $9 (U.S.). RIM shares on the TSX are up 8 per cent in early trading at $11.88.
Opinion on RIM on the Street right now is sharply divided, and Goldman is taking the side that the BlackBerry 10 launch will be a success. It said the stock's risk/reward is becoming more favourable and sees RIM's quarterly results exceeding expectations over the next four quarters.
For the market as a whole, it's the nearly $600-billion in tax increases and spending cuts set to automatically take hold Jan. 1 that continues to drive sentiment. And some hopeful comments from Speaker of the House John Boehner and President Barack Obama on Wednesday that the fiscal cliff can be avoided is boosting sentiment.
Negotiations are continuing today, with U.S. Treasury Secretary Timothy Geithner scheduled to meet with Senate Democratic Leader Harry Reid. The latest gyrations in the markets this week illustrate just how sensitive they are to every sign of progress, or lack there of, in the talks.
Overnight, there was some positive news out of Europe, where a business and consumer survey found that economic sentiment in the euro zone in November rose 1.4 points to 85.7. That beat forecasts and ended an eight-month run of falls.
Later, the U.S. said its third-quarter GDP growth came in at 2.7 per cent from an initial reading of 2 per cent, a reading that was largely expected. U.S. initial jobless claims fell 23,000 to 393,000 last week, as the impact from Hurricane Sandy wore off.
The U.S. also released its pending home sales index for October, which rose a robust 5.2 per cent to 104.8, a five-year high and much stronger than the 1 per cent that economists had forecast.
On this side of the border, Statistics Canada reported that industrial prices fell 0.1 per cent in October from September, matching expectations. Raw material prices were flat; economists were expecting a drop of 0.7 per cent.
Statscan also said the current account deficit in the third quarter was $18.91-billion, a little higher than the deficit of $18.38-billion in the second quarter and higher than the economist consensus of $18.7-billion. The Canadian dollar weakened a little on the news and is down 0.0004 at 1.008 per U.S.
Here's a look at some other stocks moving on news this morning:
Royal Bank of Canada kicked off the bank earnings season with a 22 per cent boost in quarterly profits. With one-time items excluded, Royal Bank made $1.27 a share, which was close to analyst expectations and the stock is up a modest 0.7 per cent in early trading.
Gildan Activewear Inc. said it booked net profit of $89-million (U.S.) or 73 cents per share, compared with profit of $48.5-million or 40 cents per share in the year-earlier period. Shares are up 4.2 per cent.
Tiffany & Co. shares are down 8 per cent at the start of trading after the company cut its 2012 guidance to $3.20-$3.40 from $3.55-3.70.
Target shares are down 2 per cent in early trading after its same-store sales unexpectedly fell in November by 1 per cent. Analysts were expecting a 2.1 per cent increase.
Disney shares are up 0.7 per cent after the media giant late Wednesday hiked its annual dividend by 25 per cent to 75 cents a share.
- S&P/TSX Composite$13.87K-85.82(-0.62%)
- Dow Jones Industrials$17.89K+117.52(+0.66%)
- NASDAQ NMS COMPOSITE INDEX$4.82K+42.24(+0.88%)
- Royal Bank of Canada$77.71-0.21(-0.27%)
- Gildan Activewear Inc$39.22+0.25(+0.64%)
- Tiffany & Co$72.04+0.69(+0.97%)
- Walt Disney Co$104.36+1.10(+1.07%)
- Target Corp$80.12+0.62(+0.78%)
- Updated May 2 4:00 PM EDT. Delayed by at least 15 minutes.