Figures showing that the Chinese economy is on track for solid growth gave the Toronto stock market a sharp boost in early trading.
The S&P/TSX composite index gained 94.05 points to 15,175.37 after data showed that Chinese economic growth rose to 7.5 per cent over a year earlier in the three months ended June 30 from the previous quarter’s 7.4 per cent.
The report was in line with the ruling Communist Party’s 7.5 per cent target for the year, higher than expectations for a 7.4 per cent advance.
“Overall, the numbers for China are pretty solid though increased government spending and looser monetary policy were needed to achieve these results,” said BMO Capital Markets senior economist Benjamin Reitzes.
“That’s probably how things will play out for the rest of this year if China is going to hit its 7.5 per cent growth target.”
The Canadian dollar was lower ahead of the mid-morning announcement on interest rates from the Bank of Canada, down 0.05 of a cent to 92.9 cents (U.S.).
Traders also digested major acquisition activity.
Private equity firm Onex Corp. is buying risk management firm York Risk Services Group Inc. for $1.33-billion (U.S.). Onex stock was up a penny to $63.86 (Canadian).
U.S. indexes were higher amid earnings reports from Bank of America and Yahoo along with word that Time Warner Inc. reportedly rejected a $80-billion (U.S.) buyout offer from Rupert Murdoch’s Twenty-First Century Fox Inc.
The New York Times reported that Twenty-First Century Fox offered to buy Time Warner for $85 per share in a cash and stock bid. Time Warner stock jumped 16 per cent to $82.48.
Twenty-First Century Fox later said in a statement that Time Warner has rejected an offer it made last month but added that it is not currently in discussions with the company.
The Dow Jones industrials gained 45.43 points to 17,106.11, the Nasdaq rose 23.9 points to 4,440.28 while the S&P 500 index climbed 7.43 points to 1,980.71.
Bank of America said Wednesday that its second quarter earnings were hit by higher litigation expenses.
The bank earned $2-billion in the second quarter after payments to preferred shareholders, compared with $3.6-billion in the same period a year earlier. Per share, that worked out to 19 cents, compared with 32 cents a year ago and higher than the seven cents that analysts were expecting. Its stock was off 1.4 per cent to $15.59.
Yahoo earned $270-million, or 26 cents per share, in the March-June quarter. That’s down from $331-million, or 30 cents per share, in the same period a year earlier. Adjusted earnings were 37 cents per share in the latest quarter, two cents short of estimates and its shares declined 3.5 per cent to $34.36.
The gold sector was up 1.8 per cent while August bullion edged up $2.30 to $1,297.30 an ounce.
There was also major news from the executive suite at Barrick Gold Corp. The miner says president and CEO Jamie Sokalsky will step down on Sept. 15. He will be replaced by senior executive vice-president Kelvin Dushnisky and executive vice-president Jim Gowans who will serve as co-presidents of the company.
The base metals sector gained 1.5 per cent in the wake of the Chinese data while September copper was unchanged at $3.25 a pound.
The August crude gained 57 cents to $100.53 a barrel and the energy sector rose 1.27 per cent.