TORONTO _ The Toronto stock market charged ahead Wednesday as oil prices stabilized following a series of jolts and traders digested positive earnings reports.
The S&P/TSX composite index gained 158.42 points to 14,548.85.
A sharp rise in oil prices helped the Canadian dollar erase early losses that took the currency to a fresh five-year low. The loonie moved up 0.1 of a cent to 87.74 cents US as the U.S. dollar made strong advances against other currencies in the wake of election results that saw the Republicans retain control of the House and gain a majority in the Senate.
U.S. indexes were also positive as the Dow Jones industrials climbed 68.91 points to 17,452.75, the S&P 500 index added 6.93 points to trade for 2,019.03 while the Nasdaq added 3.74 points to reach 4,627.38.
Oil prices jumped $1.92 to US$79.11 a barrel a day after West Texas Intermediate on the New York Mercantile Exchange tumbled to a three-year low in response to plans by Saudi Arabia to cut oil prices to its U.S. customers.
Saudi Arabia made the cut in order to compete with a surge in oil production in the United States.
``In their minds, they think why should they cut back production and let the U.S. continue full steam ahead?'', said Allan Small, senior adviser at HollisWealth.
``So the Saudis are saying, we can work with a lower price per barrel and they don't think that others can and they're hoping they can price some people out of the market. Their costs are a lot lower.''
Crude prices got extra support after the Energy Information Administration reported U.S. crude supplies rose by a smaller-than-expected 500,000 barrels last week, far less than the 1.2 million-barrel rise that had been forecast.
The move by Saudi Arabia on Tuesday sparked a selloff of TSX energy stocks with the sector dropping more than four per cent. But by late Wednesday morning, the sector had made good that loss.
The consumer discretionary sector was ahead two per cent as auto parts maker Magna International Inc. (TSX:MG) said Wednesday its third-quarter profit grew to US$470 million or $2.19 a share. That's up from $319 million or $1.39 per diluted share a year ago. Sales increased to $8.82 billion, up from $8.34 billion a year ago. Magna shares gained $5.86 or 5.3 per cent to $116.46.
The base metals sector turned positive, up one per cent while the December copper contract shed one cent to US$3.01 a pound.
The stronger greenback weighed on other commodities priced in U.S. dollars, particularly gold as the December contract in New York fell $20.80 to US$1,146.90 an ounce. The gold sector was down just 0.15 per cent.
Elsewhere on the corporate front, shares of pipeline company Enbridge Inc. (TSX: T.ENB, Stock Forum) slipped nine cents to C$52.15 after it posted adjusted earnings of $345 million or 41 cents per share, up from $278 million or 34 cents per share a year ago.
And shares in coffee and doughnut chain Tim Hortons Inc. (TSX:T.THI, Stock Forum) were ahead 55 cents to $92.39 as the company earned $98.1 million or 74 cents per share in its latest quarter, down from $113.9 million or 75 cents per share a year ago. Total revenue amounted to $909.2 million, up from $825.4 million. The company is in the midst of being taken over by American fast food giant Burger King.