CANADA STOCKS-Yellen comments pull TSX to two-week high

Tue Feb 11, 2014 4:52pm EST

* TSX rises 86.81 points, or 0.63 percent, to 13,880.99
    * Nine of the 10 main index sectors advance
    * BlackBerry drops after BBM executive leaves

    By John Tilak
    TORONTO, Feb 11 (Reuters) - Canada's main stock index hit a
two-week high on Tuesday after U.S. Federal Reserve Chair Janet
Yellen calmed the markets with an assurance that the central
bank's move to wind down its stimulus program is on track,
signaling Fed confidence that the U.S. economy is growing.
    Those comments, Yellen's first public remarks in her new
post, helped drive gains in every major sector of the index and
sent gold-mining shares to a five-month high.
    Investors also cheered an attempt by Republicans in the
House of Representatives to push forward legislation that
extends U.S. borrowing authority for a year with no strings
attached. 
    Yellen noted that the U.S. labor market recovery was "far
from complete" and said there was a need to keep an eye on a
broad range of labor market indicators, but in comments that
were soothing to markets she stressed continuity with the
policies of her predecessor, Ben Bernanke. 
    The benchmark Canadian index was up for a sixth straight
session, and appeared to be showing signs of stabilizing after a
volatile phase triggered by turmoil in emerging markets.
    "Based on the market reaction, it sounds like (Yellen) has
done a very good job of striking the right tone and in terms of
easing off the tapering but not pulling back so quickly that it
creates market panic," said Atul Tiwari, managing director of
Vanguard Investments Canada, a unit of Vanguard Group, which
manages $2.6 trillion in global assets.
    But he added a cautious note. "We're seeing a lot of
volatility. In the near to medium term, our view on the global
equity market has become more guarded," he said. "We encourage
investors to be cautious about increasing their equity risk in
the current environment."
    The Toronto Stock Exchange's S&P/TSX composite index
 closed up 86.81 points, or 0.63 percent, at 13,880.99.
    Tiwari said he was seeing Canadian investors gravitate
towards U.S. equities, citing Vanguard research based on ETF
cash flows. Pressure on materials and energy stocks will weigh
on Canadian equities this year, he said.
    Nine of the 10 main sectors on the index were higher on
Tuesday.
    Financials, the index's most heavily weighted sector, added
0.4 percent. Royal Bank of Canada rose 0.2 percent to
C$70.12, and Bank of Nova Scotia climbed 0.4 percent to
C$62.01.
    Energy shares advanced 0.3 percent. In the group, Canadian
Natural Resources Ltd climbed 0.8 percent to C$37.67.
    Shares of gold-mining companies surged 3.1 percent, a
reflection of a jump in the price of bullion. Goldcorp
Inc was up 2.5 percent at C$29.47, and Barrick Gold Corp
 rose 1 percent to C$21.56.
    Detour Gold Corp shot up 11.8 percent to C$9.20, recording
the biggest percentage gain on the index. 
    In corporate news, BlackBerry Ltd said on Monday
that Andrew Bocking, the executive in charge of its BBM instant
messaging business, has left the company. The stock was down 1.4
percent at C$10.77 on Tuesday.