The screens at the TMX Broadcast Centre in Toronto show the TSX’s closing numbers up 32.42 points on July 11, 2012.Matthew Sherwood for The Globe and Mail
The Toronto stock market was higher near midday Monday after the latest U.S. manufacturing data gave some reasons for investors to feel optimistic.
The S&P/TSX composite index moved ahead 82.27 points to 12,399.73 on the first trading day of the fourth quarter, coming off the earlier triple-digit gains made when the manufacturing numbers were released. The TSX Venture Exchange crept up 7.49 points to 1,342.00.
The Canadian dollar gained 0.36 of a cent to 102.07 cents US.
The Institute for Supply Management, a trade group of U.S. purchasing managers, says its index of factory activity rose to 51.5 in September, up from 49.6 in August. A reading above 50 signals and below indicates contraction.
"You are going to see some signs of encouragement from that, but at the same time exports are still shrinking," said Gavin Graham, president of Graham Investment Strategy Ltd.
China's Purchasing Managers' Index for September came in at 49.8, marking a further contraction in activity in the region. Meanwhile, the eurozone's manufacturing sector experienced a better month, though its September PMI still contracted for the 14th consecutive month.
"If the weakness in China and Europe continues, those are major markets for the U.S., it's going to be difficult for it to disclose strength," Graham added.
Also, the results of an independent audit of 14 Spanish banks were released after the market close on Friday and showed the lenders need an extra C60 billion (US$77.6-billion) in capital. The figure is roughly as expected and well within the C100 billion in rescue loans that Madrid can get from fellow eurozone countries to help the banks.
But there was still concern that Moody's ratings agency could downgrade Spain's debt rating to junk status.
On Wall Street, the Dow Jones industrials rose 147.77 points to 13,584.90. The Nasdaq composite index lifted 22.38 points to 3,138.61 and the S&P 500 index was up 14.02 points to 1,454.69.
In commodities, November crude on the New York Mercantile Exchange gained 54 cents to US$92.73 a barrel. The TSX energy sector was up 1.2 per cent.
The gold sector moved 0.8 per cent higher as December gold bullion increased $5.60 to US$1,779.50 an ounce, while December copper was up two cents at US$3.78 a pound.
In Canadian corporate developments, Magna International Inc. (TSX:MG) said it has signed a deal to buy Ixetic Verwaltungs GmbH, a manufacturer of automotive vacuum, engine and transmission pumps for C308 million. The company also said a subsidiary has signed a deal with a joint-venture partner to buy the remaining 50 per cent stake in STT Technologies, a supplier of transmission and engine oil pumps. Shares of Magna rose 2.5 per cent, or 98 cents, to $43.49.
Wi-LAN Inc. (TSX:WIN) said it has bought a portfolio of more than 150 patents and patent applications from Alvarion Ltd. for $19-million. Its shares were up four cents to $5.57.
In Europe, Germany's DAX stock index rose 1.6 per cent to 7,328.45 and France's CAC-40 was up 2.3 per cent to 3,433.46. Britain's FTSE 100 rose 1.5 per cent to 5,828.09.
In Asia, markets in China, Hong Kong and South Korea were closed for public holidays. In Tokyo, Japan's benchmark Nikkei 225 index fell after a closely watched survey showed confidence in the economy weakening.
The Nikkei 225 index shed 0.8 per cent to 8,796.51. Toyota Motor Corp. lost 1.7 per cent and Nishimatsu Construction Co. slid 4.2 per cent.