TSX rallies on U.S. economic hopes
By Jon Cook
TORONTO (Reuters) - Canadian stocks closed 1 percent higher on Thursday as material and financial shares were boosted by U.S. housing data that allowed investors to focus on the prospect of U.S. economic recovery instead of Europe's persisting debt crisis.
Resource issues rebounded from Wednesday's sharp selloff, supported by figures showing pending sales of existing U.S. homes surged to a 1-1/2-year high in November, another signal that the world's largest economy is emerging from its doldrums.
"The good news is that the (U.S.) economy is not collapsing," said Paul Hand, managing director at RBC Capital Markets. "There's a prospect of a bottom in housing prices and in housing starts and maybe the worst is over in terms of that."
U.S. economic momentum was underscored by other data on Thursday that showed the four-week moving average for jobless claims fell to its lowest point since mid-2008, while regional factory data showed the economy gaining ground as the year ended.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 113.29 points, or 1 percent, at 11,841.70. It was its biggest jump in a week.
All of the TSX's 10 main sectors rose, led by the heavyweight materials group, which gained nearly 2 percent on the back of gold mining stocks, which rose as bullion moved sharply off its early-session lows. <GOL/>
Barrick Gold (ABX.TO: Quote) was the biggest mover, jumping 1.8 percent to C$46.07.
The more bullish U.S. data helped overcome a shaky start to the day. The TSX index opened lower after a key Italian debt auction showed 10-year yields still close to levels at which other euro zone governments have been forced to seek bailouts. Continued...