December 6, 2007 / 2:27 PM / 10 years ago

Stocks push higher as resources rally

4 Min Read

TORONTO (Reuters) - The Toronto Stock Exchange's main index finished strongly higher on Thursday, as robust resource issues benefited from higher commodity prices and led a broad afternoon rally.

The materials sector was helped by a rally in gold prices and a surge in units of Fording Canadian Coal Trust FDG_u.TO after it said it was weighing its options, including the sale of the company.

The coal producer jumped C$4.65, or 13.5 percent, to C$39.10, making it the biggest net advancer by weight. Teck Cominco TCKb.TO, which has a nearly 20 percent stake in Fording, rose C$1.61, or 4.4 percent, to C$38.11. The sector as a whole was up 2.4 percent.

The energy sector was up 1.7 percent while the price of oil climbed $2.74 to $90.23 a barrel on supply concerns and weakness in the U.S. dollar.

Canadian Natural Resources (CNQ.TO) rose C$1.60, or 2.4 percent, to C$68.09 and Husky Energy (HSE.TO) gained 81 Canadian cents, or 2 percent, to C$42.10, the day after it said it would form a joint venture with British oil major BP Plc (BP.L).

Stocks also got some support as U.S. President George W. Bush outlined a plan to freeze interest-rate increases on adjustable-rate subprime mortgages for five years.

"I think the market is looking at that in positive a way, although I do think we're bailing out the people who made some bad decisions," said Adrian Mastracci, portfolio manager and president at KCM Wealth Management Inc. in Vancouver.

"In the short term, in the next six months, it's still going to be a rocky road."

The S&P/TSX composite index .GSPTSE closed up 115.26 points, or 0.84 percent, at 13,849.80.

But the financial sector remained the lone group in negative territory, down 1 percent, hurt by Canadian Imperial Bank of Commerce's (CM.TO) decline after the bank said its hedged exposure to the subprime market could result in significant losses.

CIBC fell C$4.69, or 5.4 percent, to C$82.40. Bank of Nova Scotia (BNS.TO) rose 21 Canadian cents, or 0.4 percent, to C$52.36 after it reported an increase in fourth-quarter earnings but gave a cautious outlook for next year.

"Nobody knows the size of that problem, and CIBC is really just a representation of what's out there," said Mastracci. "Financials are still a bit of a worry because of all the uncertainty that faces them."

Also in the sector, DundeeWealth Inc (DW.TO) slid C$2.33, or 10.7 percent, to C$19.48 on worries that the company will not be sold.

Market volume was 430 million shares worth C$7.6 billion. Advancers outpaced decliners 982 to 650. The blue chip S&P/TSX 60 index .TSE60 closed up 5.05 points, or 0.63 percent, at 806.99.

In New York, stocks climbed on hopes that Bush's plan to stem U.S. home foreclosures would help keep the economy from slipping into a recession.

The Dow Jones industrial average .DJI ended up 174.93 points, or 1.3 percent, at 13,619.89, and the Nasdaq composite index .IXIC rose 42.67 points, or 1.6 percent, to 2,709.03.

($1=$1.01 Canadian)

Editing by Rob Wilson

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