TSX, oil, gold all move higher

The Toronto Stock Exchange ended higher Monday, but gave back much of the strong gain made earlier in the day while gold crossed above $1,900 US an ounce for the first time ever.

The benchmark S&P/TSX Composite Index gained 60.89 points to 12,068.36 after being up as much as 210 points earlier. The Dow Jones Industrial Average was 37.00 points higher to 10,854.65 The broader S&P 500 index was .29 of a point higher at 1123.82.

The technology-focused Nasdaq index was 3.54 points higher to 2,345.38. December gold's official close was $1.891.90 US an ounce, up $39.70, but in electronic trading later, it rose to as high as $1,901.50, before falling back to $1,897.50.

The Canadian dollar was down 0.15 of a cent at 101.00 cents US.

Brent crude slipped to near $108 US a barrel as Libyan rebels captured most of Tripoli, boosting hopes the OPEC nation's oil exports could resume soon. But the North American benchmark, West Texas Intermediate, moved in the other direction, up almost $2 to $84.21.

Brent has been at an unusual premium to the U.S. crude benchmark for months largely because Europe relies more than the U.S. on oil from African nations that saw their outputs impacted by democratic uprisings earlier this spring.

Britain's FTSE 100 jumped one per cent to 5,088.33 while Germany's DAX remained steady at 5,482.21. France's CAC 40 rose one per cent to 3,046.13. Wall Street was set to gain, with Dow Jones industrial futures up 0.7 per cent to 10,893 while S&P 500 futures added 0.8 per cent to 1,133.40.

Fears calmed

Investors are looking with anticipation to a speech Friday by U.S. Federal Reserve Chairman Ben Bernanke at a retreat in Wyoming.

The Fed pledged earlier this month to keep interest rates super-low through mid-2013. Investors hope Bernanke will announce, or at least preview, further steps to help the economy including a third round of bond purchases known as quantitative easing.

"I think Ben Bernanke's meeting in Jackson Hole will be very much in focus here," said Tom Kaan, head of equity sales at Louis Capital Markets in Hong Kong. The consensus is that a third round of quantitative easing will come in some form, he said.

"The world is in a very dire situation at the moment," Kaan said. "People will react. Most of that reaction will come from fear."

It was a jittery day of trading in Asia.

Japan's Nikkei 225 index lost one per cent to close at 8,628.13 — a five-month low — as a persistently strong yen rattled nerves. A strong yen hurts exports by making them more expensive.

Japan intervened in currency markets earlier this month to try to reverse the yen's climb. The decision to sell the yen and buy the U.S. dollar worked initially, sending the greenback toward 80 yen. But the dollar has been weighed down by the dimming outlook for U.S. economy and is back down to mid 76-yen levels.

South Korea's Kospi also took a hit, dropping two per cent to 1,710.70.

Hyundai Heavy Industries Co., South Korea's leading shipbuilder, toppled 4.4 per cent.

Mainland Chinese shares sank for a fifth straight trading day as investors fretted over possible monetary tightening measures, and over the global outlook.

The Shanghai Composite Index lost 0.7 per cent to 2,515.86 while the Shenzhen Composite Index lost 0.9 per cent to 1,124.17. Shares in cement, food-related industries and banks weakened.

Hong Kong's Hang Seng swung into positive territory to eke out a 0.5 per cent gain at 19,486.87. China Mobile Ltd. jumped 2.9 per cent.

European bank worries

Fears that European banks may be headed for huge losses on government bonds have caused investors to unload banking shares in Europe and elsewhere.

China Construction Bank Ltd., the country's third-biggest commercial lender, was down 1.3 per cent despite announcing that its first half profit rose 31 per cent from a year earlier. The Industrial and Commercial Bank of China, the world's biggest bank by market value, lost 1.2 per cent. Japan's Mizuho Financial Group fell 2.6 per cent.