By Romina Maurino, The Canadian Press
TORONTO - Stock markets opened higher Tuesday as oil prices surged close to US$114 a barrel and health-care company Johnson & Johnson provided a positive earnings surprise after days of disappointing corporate results.
Toronto's S&P/TSX composite index rose 122.18 points to 13,860.78 in early trading, after gaining 55 1/2 points Monday.
The TSX Venture Exchange climbed 6.27 points to 2,553.93.
Light sweet crude for May delivery on the New York Mercantile Exchange was up $2.01 to US$113.77 a barrel, topping the previous intraday high of $112.21 last week, as the American dollar declined against the euro.
"We've seen another swing down in the U.S. dollar so I think we saw short-term traders go back into oil as a hedge against the falling dollar," said Mark Pervan, commodity strategist at ANZ Bank in Melbourne, Australia.
Crude was also supported by news of supply disruptions, though analysts said the interruptions were minor. Gold gained $6.50 to US$935.20 an ounce.
The Canadian dollar traded at 98.03 cents, down 0.05 cent.
In the U.S., investors were encouraged after the New York Federal Reserve reported that regional manufacturing expanded modestly in April, after shrinking at a record clip in March.
Johnson & Johnson surprised Wall Street by saying its first-quarter profit jumped 40 per cent on rising sales and a slight decline in costs. Results from the maker of consumer staples ranging from diapers to drugs were a relief, following mostly gloomy earnings reports last week and Monday.
Investors, however, remain concerned about inflation, which soared in March at nearly triple the rate that had been expected as the costs of energy and food both climbed rapidly.
The U.S. Labour Department said wholesale prices rose by 1.1 per cent last month - the second-biggest increase in the past 33 years - powered by rising fuel and food prices.
New York's Dow Jones industrial average rose 61.79 points to 12,363.85, while the Nasdaq composite index was up 14.75 at 2,290.57 and the S&P 500 climbed 8.45 to 1,336.77.
The Toronto energy sector was up 1.6 per cent, while the financial sector edged up 0.3 per cent.
Shares in EnCana (TSX: ECA.TO) were up $1.08 at $83.01. Royal Bank (TSX: RY.TO) rose 12 cents to $45.92.
Steel superstructure firm ADF Group Inc. (TSX: DRX.TO) reported a 2007 profit of $34 million, boosted by a $28.2-million tax gain, up from a prior-year profit of $10.4 million. Its shares traded at $5.40, up seven per cent.
Cancer drug developer Lorus Therapeutics Inc. (TSX: LOR.TO) posted a loss of $3.9 million or two cents per share, compared with a year-earlier loss of $2.1 million, as research and development costs increased. Lorus stock fell almost three per cent to 17 cents.
Foam shoe maker Crocs Inc. lowered its first-quarter forecast late Monday, blaming fewer sales of its colourful footwear and costs related to the closure of a plant in Canada. The company plans to close its factory in Quebec City to consolidate production at lower-cost facilities, which will result in a one-time charge of about $16 million and leave about 670 people out of work.
U.S. Bancorp reported first-quarter earnings of US$1.09 billion, off from $1.13 billion a year earlier but two cents per share ahead of analyst expectations. The four per cent earnings decline was due to impairment charges and rising loss reserves.
Meanwhile, new data showed the number of U.S. households receiving foreclosure documents jumped 57 per cent in March to 234,685, according to RealtyTrac Inc. of Irvine, Calif.
Delta Air Lines and Northwest Airlines agreed late Monday to combine in a stock-swap arrangement that would assemble the world's biggest airline. Delta said the combined carrier, flying with the Delta colours and based in Atlanta under Delta CEO Richard Anderson, would have an enterprise value of US$17.7 billion.
Overseas, Asian stocks rebounded moderately as traders bought stocks hit by the previous day's plunge, but anxiety remained over the U.S. economy and further monetary policy tightening in China.
In Japan, the benchmark Nikkei 225 stock index rose 73.07 points, or 0.6 per cent, to 12,990.58, recovering some of its 3.1 per cent tumble Monday.
In Hong Kong, the blue chip Hang Seng index rose 90.13 points to 23,901.33 after losing 3.5 per cent Monday.
In mainland China, the Shanghai composite ended up 1.6 per cent at 3,348.35 after falling 5.6 per cent the previous day.
The FTSE 100 index was up 1.2 per cent in London, while the Frankfurt DAX and Paris CAC-40 were each up one per cent.
