UPDATE 6-Toronto stocks rally on U.S. rate-cut signals
(Adds details, quotes)
By Leah Schnurr
TORONTO Jan 10 (Reuters) - The Toronto Stock Exchange's main index recovered from big early losses and finished higher on Thursday as banking and resource issues were encouraged by expectations of further interest rate cuts following comments made by U.S. Federal Reserve Chairman Ben Bernanke.
Financials led the way up, gaining 1.5 percent. Canadian Imperial Bank of Commerce (CM.TO: Quote) was among the biggest net gainers, rising C$2.34, or 3.4 percent, to C$71.34.
"People get a general sense that the Federal Reserve when they meet are going to cut (interest rates) by 50 basis points," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier. "There was some talk that it was only going to be 25, but I think most people now believe it's going to be 50 basis points."
"Definitely the tone was that (Bernanke) was going act fairly aggressively to stem the downturn in the economy," Nakamoto added.
Bernanke said in remarks to a housing and finance group that the U.S. economic outlook was worsening and that the Fed was ready to act aggressively.
After swinging 100 points both up and down, the S&P/TSX composite index .GSPTSE closed up 62.69 points, or 0.46 percent, at 13,642.63. Eight of the TSX's 10 main groups were in positive territory.
"What we've been most used to recently has been the fact that the market has been very, very reactive to any news, good or bad," said Michael Sprung, president at Sprung & Co. Investment Counsel. Continued...