U.S. stocks rallied at the open Friday, after European leaders reached a deal to help struggling euro-zone banks.
The TSX saw a big triple-digit bounce just after the open as commodity prices rose and European leaders appeared to have made some serious progress on solving their persistent debt crisis.
The S&P/TSX Composite Index leaped 158.4 points, to 1.4%, to begin trading at 11,583.10
The Canadian dollar grew 1.35 cents to 98.15 cents U.S.
While rising commodity prices could boost the TSX, continuing pressure on Research In Motion shares is expected to be a weight, though the already-eroded valuation of the company means it doesn't have the market heft it once did.
The BlackBerry maker reported dismal earnings results after the close of markets on Thursday, with an adjusted loss of 37 cents per share that widely missed the three-cent-per-share loss analysts had expected. It also announced another delay to the launch of its new smartphones.
The Waterloo, Ont.,-based company also said it would lay off a third of its workforce — or about 5,000 employees — to contain costs as it pushes ahead with a complete revamp of the BlackBerry operating system.
In Canadian corporate news, Canadian Pacific Railway has named Hunter Harrison as its new president and chief executive officer, the result of changes pushed through by the company's largest shareholder. Harrison's appointment was widely expected after a high-profile battle waged against the Calgary-based railway's former leadership by William Ackman, head of a New York-based investment fund.
On the economic slate, Statistics Canada reported this morning that real gross domestic product surged 0.3% in April, following a narrow 0.1% gain in March. Most of the April increase was attributable to mining and oil and gas extraction and wholesale trade.
The agency also reported that its Industrial Product Price Index was flat last month from April. Price increases for motor vehicles and lumber were offset mainly by a 2.1% decline in petroleum and coal products. The Raw Materials Price Index descended with crude oil prices to slid 1%.
ON BAYSTREET
The TSX Venture Exchange improved 17.26 points to 1,181.73. The Nasdaq Canada index subtracted 1.26 points to 355.37
All but one of the 14 Toronto subgroups were positive to start things off. Metals and mining led the parade, up 3.9%, while global base metals and energy each traveled 2.7% higher.
Only a 3.1% collapse by information technology stocks kept things from being unanimous.
ON WALLSTREET
A "breakthrough" deal out of Europe and hiking oil prices sent U.S. markets soaring soon after the opening bell Friday.
The Dow Jones Industrials galloped ahead 217.81 points, or 1.7%, to start off the day at 12,820.07
The S&P 500 hiked 25.81 points to 1,354.85. The Nasdaq Composite Index rocketed up 63.08 points to 2,912.57
Investors in U.S. and European banks cheered the deal. Banks including Bank of America, Citigroup, JPMorgan Chase, Morgan Stanley, and Goldman Sachs all rose between 2% and 5%.
Friday also marks the end of the first half of the year. The three major indexes are on pace to close out with gains between 3% and 9%.
Home builder KB Home reported a second-quarter loss Friday that was smaller than expected. That sent shares up more than 6% in early trading.
Several large companies that had a rough Thursday afternoon continued sinking early Friday.
Nike shares tumbled 9%, a day after the company reported quarterly earnings that missed analyst estimates. The stock fell in after-hours trading Thursday, when it was joined by other sportswear producers and retailers, including Under Armor, Lululemon Athletica and Dick's Sporting Goods
Shares of Research In Motion fell 14%, after the BlackBerry maker reported a wider-than-expected loss Thursday, and another delay of its long-awaited BlackBerry 10 operating system.
Ford shares slid 2%. The automaker on Thursday lowered its guidance based on poor performance by its international divisions.
Shares of gun manufacturing company Smith & Wesson surged after the company's earnings beat profit expectations by a wide margin.
At the two-day European Union summit in Brussels, E.U. leaders struck a "breakthrough" deal early Friday to ease the recapitalization of banks, which should help draw the euro-zone back from the brink of its debt crisis.
The deal includes a mechanism to inject capital directly into banks, which may reduce what one bond analyst called "the bank-sovereign negative feedback loop."
The expert went on to say the loop starts when a nation borrows to recapitalize its troubled banks, which then increases the country's debt, pushes up bond yields, reduces bond values and forces banks to require even more capital.
Economically speaking, the Chicago Purchasing Managers' Index for June was due out this morning from economic consulting firm Kingsbury International. The index is expected to come in at 53, up from 52.7 last month. Any reading above 50 signifies expansion in the region's manufacturing sector.
Also, the University of Michigan's Consumer Sentiment Index for June will come out. It's expected to hold steady at 74.1.
The price on the benchmark 10-year U.S. Treasury dipped, pushing the yield up to 1.66% from Thursday's 1.58%. Treasury prices and yields move in opposite directions.
Oil for August delivery rebounded $3.91 to $81.60 U.S. a barrel.
Gold futures for August delivery jumped $48.40 to $1,598.30 U.S. an ounce.
