Canadian stocks exit year on a high note




C anadian stocks closed the doors on 2010 with an optimistic slam as the country's top benchmark exchange marked double-digit gains on growing demand for commodities and materials in a stronger economy.

The S&P/TSX composite index gained 14.5 per cent during 2010 to end what analyst called a V-shaped year of ups and downs and ups again, closing on Friday at 13,443.22.

In mid-November the Toronto Stock Exchange's benchmark breached the 13,000 threshold, a normal level before the global financial crisis hit in 2008, climbing up from a low of 11,902.50 in July as markets regained confidence in the economy.

"Stocks finally woke up to the fact that earnings in 2010 were phenomenal," Barry Schwartz, with Baskin Financial Service said. "In fact, S&P cumulative earnings are on pace to grow 40 per cent, according to analysts."

Schwartz attributed major cost-cutting, including trimming staff, throughout corporations as pulling up profits as the world regained its appetite to build for the future.

"We had the best of both worlds here in Canada," said Schwartz. "We had not only growing earnings, we had a huge demand for commodities and for gold."

The precious metal, traditionally considered a safe haven in uncertain times, rose 29 per cent this year. Gold broke records all year and ended 2010 at $1,415.85 an ounce, the 10th annual gain.

The Canadian dollar exited the year slightly above par to the U.S. greenback, at $1.002 US. The loonie rose by 10 per cent this year to average 97.11 cents US.

Meanwhile, oil futures surged Friday to the highest year-end prices since 2007 as investors flocked to commodities and away from a weaker U.S. dollar.

Crude oil climbed $1.54 US per barrel, to settle at $91.38 US on the New York Mercantile Exchange. Futures advanced 15 per cent in 2010 as the global economic recovery gained momentum, stoking demand for raw materials.

In Canada, energy indexes under-performed the TSX, rising nine per cent in 2010 against a massive 37 per cent heave of relief the year prior as oil prices picked up.

Analysts recognize 2009 as an anomaly as energy demand resuscitated and grew -- 2010 still saw more winners than losers.

"The number of companies that gained over the year outnumbered the decliners by a three-to-one margin," said Dan Grager, with Peters & Co. investment brokers. "But the ones that didn't perform well comprise the biggest weight on the index, the Suncors and Encanas of the world."

Oilsands giant Suncor Energy, the largest player by per cent weight on the capped index, gained three per cent, while natural gas-weighted Encana Corp. fell 12 per cent.

Natural gas futures on Friday were down 21 per cent from their January opening price of $5.57 US.