New York markets spent most of the day trying to recover from weaker outlook on the U.S. economy, delivered through both a manufacturing report and comments from the St. Louis Federal Reserve president on a possible U.S. recession.
Toronto’s S&P/TSX composite index was up 100.3 points to 13,265.80.
The Canadian dollar slipped 0.10 of a cent to close at 86.51 cents US.
On Wall Street, the Dow Jones industrials closed ahead 27.95 points to 12,382.3. The Nasdaq composite index was flat, up 0.62 points to 2,422.26 and the S&P 500 index was up 3.69 points to 1,424.55.
Initially, the TSX mining sector was down, while the U.S. markets were positive on a series of mergers.
But near mid-day, mining posted a turnaround on the TSX as tensions eased over the possibility of a strike at CVRD-Inco in Sudbury, Ont. Workers announced a tentative settlement on Monday.
Investors feared a strike would drive up the price of nickel, which more than doubled over the last year, hitting a record in February on demand from China.
The TSX mining sector increased 0.55 per cent.
The recovery shifted focus to the energy index, which posted gains of 1.29 per cent, as True Energy Trust gained 4.44 per cent to $6.11 and Talisman Energy Inc. rose 3.2 per cent to $20.90.
The May crude oil contract on the New York Mercantile Exchange rose seven cents to US$65.94 a barrel as tensions continued between Britain and Iran over the 15 British navy crew hostages captured over a week ago.
The gold index rose 1.86 per cent as the April bullion contract in New York increased $2.70 to close at US$665.70 an ounce. The June bullion contract ended the session ahead $2.50 to $671.50.
The junior TSX Venture Exchange increased 3.23 points to 3,190.06.
The release of U.S. manufacturing data showing weaker results erased earlier gains in New York.
The Institute for Supply Management said its manufacturing index slipped more than economists projected in March. The ISM manufacturing index moved to a reading of 50.9 for March compared to 52.3 last month. Consensus forecasts had expected a reading of 51.1.
"American factories remain in a holding pattern, weighed down by slumping demand for housing-related products. At the same time, input costs are on the rise again," said Sal Guatieri, senior economist at the Bank of Montreal in a report.
"The Fed will continue to worry about both inflation and growth, and stick to the sidelines in the near term."
Meanwhile, St. Louis Federal Reserve president William Poole told New York bankers that a U.S. recession is still possible. Poole added that inflation is still a "major concern" and that further rate hikes aren’t out of the question.
The events only seemed to further expectations that the U.S. economy is slowing down.
Several major U.S. acquisitions helped soften the impact of the negative outlook. The biggest deal was the acquisition of credit card transaction processor First Data Corp. by an affiliate of private-equity firm Kohlberg Kravis Roberts & Co. for about US$29 billion.
KCP Income Fund shares jumped 24 per cent after the bleach maker agreed to be bought for $804 million by New York-based private equity firm Caxton-Iseman Capital Inc., a 25 per cent premium over its March 30 closing unit price of $8 and a 27.6 per cent premium to the 10-day volume weighted average trading price.
Junior miner Tiomin Resources Inc. has agreed to issue $10.9 million worth of its stock to Chinese metals giant Jinchuan Group Ltd., giving Jinchuan a 20 per cent stake in the company. Tiomin said it will issue 72.5 million shares at 15 cents each to raise funds for development of its Kwale mineral sands project in Kenya.
Subprime mortgage lender New Century Financial Corp. filed for Chapter 11 bankruptcy protection, and said it would fire 3,200 workers, or 54 per cent of its work force, and sell the company’s major assets.
Once the second-largest provider of subprime mortgages in the U.S. based on loan volume, New Century was the latest lender to fall on hard times amid a spike in U.S. mortgage defaults caused by borrowers unable to make payments.
Hanfeng Evergreen Inc. has raised more than $80 million in financing that gives Canada’s second-largest fertilizer producer, Agrium Inc., nearly 20 per cent of Hanfeng and expands both firms’ sales of fertilizer in China.
Hanfeng said it struck a deal to sell 11.96 million common shares to Agrium, raising $74.4 million and giving Agrium about 19.6 per cent of the company.
Toymaker Mega Brands Inc. says its challenges are behind it after fourth-quarter profit fell to US$2.8 million from a year-earlier US$20.9 million, dragged down by Magnetix lawsuits and product replacement costs. Earnings for the quarter ended Dec. 31 amounted to eight cents a diluted share, down from 61 cents per share a year ago, the Montreal-based firm said. Mega Brands shares dropped 9.31 per cent, or $2.36, to $23.00.
Web search giant Google Inc. is said to be interested in buying advertising placement firm DoubleClick in a deal worth about US$2 billion, according to the Wall Street Journal.
