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TSX up on crude oil lift, Arctic Glacier plunges around 40%

Published: 03:09 13 Aug 2011 AEST

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Canadian markets rose on Friday, helped by higher crude oil prices on the back of a robust 0.5% increase in US retail sales for July, the biggest jump in four months.

The S&P/TSX Composite Index gained over 29 points, or 0.23%, to 12,569.17 just after noon, while the more junior S&P/TSX Venture Composite climbed 17.22 points, or just less than 1%, to 1,811.03.

A broad number of sectors advanced, with health care gaining the most at 2.3%, followed by metals and mining at 1.8%. Utilities stocks rose over 1%, while energy stocks added 0.7%.

Crude oil for September delivery rallied 0.8%, or 69 cents, to US$86.41 per barrel. Gold futures declined 0.74%, or $12.90, to $1,738.60 per ounce, with several in the sector posting losses. Kinross Gold (TSE:K) fell a minor 0.45%, while Barrick Gold (TSE:ABX) and Goldcorp (TSE:G) dropped more than 2% and 3% respectively.

In corporate news on the day, Arctic Glacier Income Fund (TSE:AG.UN) raised doubt where it would be able to continue as a "going concern" without support from lenders, as legal costs and a breach of debt covenants have pushed the company to post a $16 million second quarter loss, amid poor weather also hurting sales. Shares plunged more than 38%.

It said it is in active discussions with lenders to secure a long-term refinancing solution, but added that "there can be no assurance that such relief will be approved. Without the continued support of the secured lenders, there remains significant doubt that the fund will be able to continue as a going concern."

The Winnipeg, Manitoba-based company is also facing several ongoing US state investigations regarding antitrust laws. The lawsuits alleged that Arctic Glacier and a second, Texas-based packaged ice company, Reddy Ice, were operating in an "anti-competitive behaviour" in the U.S. and Canada.

Meanwhile, oilfield services company Tuscany International Drilling (TSE:TID) rallied around 5% after it announced that second quarter revenue jumped to $29.8 million, up from $19.3 million in the previous quarter and from $1.7 million a year ago. The company also announced it recently entered into letters of intent to contract six of its drilling rigs, which means that once these are contracted, all but two of Tuscany's original fleet of 19 rigs will be contracted.

Connacher Oil Gas (TSE:CLL) dropped more than 5% after quarterly losses widened, as lower crude oil production offset a rise in bitumen production.

US Markets

Stocks were also higher and more stable in the US for a change, with the Dow up over 141 points, or 1.3%, to 11,285.10, as positive US retail sales data was somewhat offset by a consumer sentiment report.

The University of Michigan/Thomson Reuters index of consumer sentiment dropped to its lowest point in more than 30 years in August, to 54.9.

The Commerce Department, however, also said Friday that retail sales in the US rose in July by 0.5%, the most it has in four months, and showing that consumers have proved resilient to slow economic growth. The increase follows a 0.1% gain in June. Excluding volatile auto sales, sales still rose 0.5%, beating expectations.

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