TSX surges 188 points Thursday

The S&P/TSX composite index chalked up a solid gain for a second session, ahead 187.89 points to 12,214.65 and the TSX Venture Exchange climbed 37.37 points to 1,472.5.

The World Bank trimmed its growth outlook for China this year to 8.2% from 8.4%. It cited U.S. and European economic woes and Chinese lending and investment curbs imposed to cool an overheated economy.

The bank stressed it still expects a gradual slowdown at the world’s second-biggest economy but added that Beijing should be ready to launch new stimulus if needed.

China’s central bank reported a surprising jump in loans in March. That eased concerns about a sudden slowdown in the Chinese economy, which has helped pull the globe out of recession.

But the government has been clear about its intentions to rein in an overheated economy for some time.

“I’m shocked any time someone is surprised at the comments coming from China that their economy is slowing down,” said Philip Petursson, director of institutional equities at Manulife Asset Management.

The World Bank report came out a day ahead of the release of China’s first-quarter economic growth figures.

Rising commodities helped push the Canadian dollar up 0.97 of a cent and back above parity to 100.55 cents US.

U.S. markets were higher despite a report from the U.S. Labour Department that said weekly unemployment benefit applications jumped 13,000 to a seasonally adjusted 380,000, the highest level in two months.

The Dow Jones industrials rose 181.19 points to 12,986.58.

The Nasdaq composite index gained 39.09 points to 3,055.55 and the S&P 500 index gained 18.86 points to 1,387.57.

North American markets broke a five-day losing streak Wednesday amid a strong start to the corporate earnings season and reassuring words on the economy from the U.S. Federal Reserve.

Aluminum giant Alcoa Inc. reported a surprise profit Tuesday while the Federal Reserve’s latest reading on economic conditions said that each of the Fed’s 12 bank districts grew at a modest to moderate pace from mid-February through April 2. And the Fed’s so-called Beige Book survey noted that hiring was steady or increased in most of the country.

“Things are actually better than we thought,” Petursson added. “And we’re hearing a lot more of that. Fundamentals continue to show the strength and investors need to embrace that.”

The positive earnings news continued after the close as Google Inc. handed in quarterly earnings of $10.08 a share, handily beating estimates of $9.65. It also announced a two-for-one stock split.

There was also relief that Italian and Spanish 10-year bond yields moved slightly lower in a second day of easing. A sharp rise in Italian and Spanish yields earlier in the week had underlined fears that borrowing costs could hit unsustainably high levels.

Spain is the euro zone’s fourth-largest economy, while Italy is the third-largest euro zone economy as well as the third-largest global market for government bonds.

The TSX base metals sector led advancers, up almost four per cent as copper prices recovered somewhat from a string of losses.

The metal, viewed as an economic barometer because it is used in so many industries, had lost about seven per cent over the last week amid soft trade data from China, the biggest consumer of the metal. But on Thursday, copper was ahead eight cents to US$3.72 a pound. Teck Resources (TSX:TCK.B) climbed $1.56 to C$36.93 and First Quantum Minerals (TSX:FM) was ahead 97 cents at $22.54.

Railway stocks advanced alongside miners with Canadian Pacific Railway (TSX:CP) ahead $1.58 to $75.98 and Canadian National Railways (TSX:CNR) was up 94 cents to $78.78.

The energy sector was 2.45% higher as the May crude contract on the New York Mercantile Exchange gained 94 cents to US$103.64 a barrel. Canadian Natural Resources (TSX:CNQ) gained $1.34 to C$33.01 and Suncor Energy (TSX:SU) was up 83 cents at $30.95.

The gold sector climbed about three per cent as bullion prices shed early losses and gained $20.30 to US$1,680.60 an ounce. Goldcorp Inc. (TSX:G) improved by 98 cents to C$41.79 while Barrick Gold Corp. (TSX:ABX) strengthened by 76 cents to $41.98.

Financials also provided lift as Manulife Financial (TSX:MFC) climbed 77 cents to $13.40.

There was slight weakness in the consumer staples and utilities sectors.

In Canadian earnings news, Corus Entertainment Inc. TSX:CJR.B) handed in a profit of $31.6-million or 38 cents a share for its second quarter, beating estimates by two cents. The Toronto-based television and radio company saw its revenue increase by eight per cent over the same time a year before to $205.7 million and its shares slipped 51 cents to $23.96.

In other corporate developments, Valeant Pharmaceuticals International Inc. (TSX:VRX) has acquired privately held Pedinol Pharmacal Inc. for an undisclosed price pegged at less than 1.5 times sales. Pedinol, a podiatry-focused, privately owned specialty pharmaceutical company, reported $18 million in revenue in 2011. Valeant shares gained 75 cents to $53.47.