CANADA STOCKS-Upbeat sentiment buoys TSX to 2-1/2 year high

Thu Feb 3, 2011 5:41pm EST
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   * TSX up closes up 1.18 pct at 13,841.35
 * Nine of the 10 main groups advance
 * Techs up 3.94 pct, materials up 2.24 pct
 (Adds details, comments)
 By Solarina Ho
 TORONTO, Feb 3 (Reuters) - Toronto's main stock index
surged to its highest close since July 2008 on Thursday, as
techs, materials and financial issues led a rally spurred by
positive economic data and modestly rosy comments by the head
of the U.S. Federal Reserve.
 Leading the charge were Imperial Oil (IMO.TO: Quote), which rose
2.11 percent to C$45.90, Toronto Dominion Bank (TD.TO: Quote), which
was up 1.9 percent at C$77.63, and Barrick Gold (ABX.TO: Quote), which
gained 2.85 percent to C$48.28.
 The energy, financial and materials groups together make up
nearly 80 percent of the TSX.
 The materials group, home to major mining firms, rose 2.24
percent. Gold companies were lifted by bullion prices, which
rose more than 1 percent as ongoing unrest in Egypt triggered
safe-haven buying. [GOL/]
 Along with Barrick, Goldcorp (G.TO: Quote) also saw healthy gains,
finishing the day up 2.93 percent at C$41.50.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE closed up 161.06 points, or 1.18 percent, at
13,841.35. It was its highest close since July 4, 2008, when
the index finished at 14,010.39.
 Nine of the index's 10 main sectors rose. The consumer
staples group was the exception, giving back 0.19 percent.
 The economically sensitive financials group climbed 1.42
 "January is the end of the first quarter, so people may be
starting to think about first quarter (bank) results ... they
must be getting more optimistic," said Douglas Davis, chief
executive of Davis-Rea.
 "People are showing renewed interest in a number of stocks
seem to be breaking out of long-term trading levels."
 Market sentiment got a lift from Fed chairman Ben Bernanke,
who offered a slightly more dovish outlook on the U.S. economy,
citing gains in household spending, improved confidence and
more bank lending. The U.S. is Canada's biggest export partner
and signs of economic recovery south of the border is good news
for Canada. [ID:nN0354501]
 "He was adamant that quantitative easing is working and
he'll continue to use it potentially if unemployment doesn't
kick in," noted Youssef Zohny, associate portfolio manager at
Van Arbor Asset Management.
 "I think that really led to the late afternoon rally ...
definitely the market appreciated comments from Ben Bernanke
 Stronger U.S. economic data, including a rise in
non-manufacturing activity and better than expected retail
numbers, also helped boost market sentiment. [ID:nN03256467]
 The market will take further direction from monthly
employment data on Friday from both the U.S. and Canada. Zohny
believes the market is anticipating strong numbers.
 In individual company news, Open Text OTC.TO surged as
much as 17 percent after it posted better than expected
quarterly earnings late on Wednesday and announced it was
buying smaller competitor Metastorm.
 The software maker was the lead net gainer on the day,
finishing 11.69 percent higher at C$55.90. [ID:nN02188563]
 Its rise helped lift the overall tech group 3.94 percent.
BlackBerry maker Research In Motion RIM.TO also climbed,
advancing 2.81 percent to C$62.12.
 Shares of Fronteer Gold FRG.TO surged 39.71 percent to
C$14.32 on news Newmont Mining Corp (NEM.N: Quote) had agreed to buy
the Vancouver-based miner for C$2.3 billion. [ID:nN03258538]
 Enbridge Inc (ENB.TO: Quote) shares slipped 1.42 percent to
C$57.68 after quarterly results by Canada's No. 2 pipeline
company missed expectations. [ID:nSGE71206Z]
 ($1=$0.99 Canadian)
 (Reporting by Solarina Ho; editing by Rob Wilson)