April 10, 2008 / 1:17 PM / in 9 years

Toronto stocks strongly higher in broad rally

<p>A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch</p>

TORONTO (Reuters) - The Toronto Stock Exchange’s main index finished sharply higher on Thursday thanks to a broad late-day rally, supported by strength in resource and financial issues.

The jump put the index back at levels not seen since the end of February, and pushed it closer to the psychologically-important 14,000-mark.

Among resource stocks, Potash Corp of Saskatchewan (POT.TO) was up C$2.98, or 1.7 percent, at C$181.90, and Canadian Natural Resources (CNQ.TO) rose C$1.70, or 2.2 percent, to C$79.82.

The energy and materials sectors gained 1 percent and 0.9 percent respectively, even though prices for the underlying commodities were weaker following a sharp bounce on Wednesday.

Shares of utility TransAlta Corp (TA.TO) gained C$1.91, or 6 percent, to C$33.12 after it said that Unit 4 at its Sundance power plant in Alberta had returned to normal service on Wednesday. The utilities sector as a whole rose 2.1 percent.

The S&P/TSX composite index .GSPTSE closed up 159.03 points, or 1.16 percent, at 13,909.58, with all 10 of its main sectors higher.

The financial sector also aided the afternoon jump, gaining 1.2 percent. Bank of Montreal (BMO.TO) was up 96 Canadian cents, or 2.1 percent, at C$47.12, and Bank of Nova Scotia (BNS.TO) rose 79 Canadian cents, or 1.7 percent, to C$46.73.

Elvis Picardo, investment strategist at Northern Securities Inc in Vancouver, said the afternoon surge seemed to be based less on news and more on “some sense that perhaps the credit crisis is dying down.”

“Over the past two or three weeks, we’ve definitely seen an easing of panic that was beginning to build up in terms of the financial institutions and the subprime crisis, but that has eased off,” Picardo said.

The TSX composite has closed higher in all but two of the past 10 sessions as investor confidence returned. But Picardo cautioned that uncertainty over the health of the U.S. economy remains, as do fears of more fallout from the credit crunch.

“I think it’s good the market is behaving the way it is, but I continue to be a little cautious, mainly because we really don’t know the extent to which the U.S. economy might be in a recession, how long it’s going to last or what the impact on earnings is.”

Analysts said investors will be watching the results of earnings season closely for an indication of which way the economy and markets will go.

“If the market can draw some kind of resolution from corporate earnings and comments made by company management going forward, then maybe we’ll have something to build on,” said Rick Hutcheon, president and chief operating officer at RKH Investments.

On the downside, MacDonald Dettwiler and Associates (MDA.TO) was the biggest drag on the benchmark after Ottawa blocked the sale of its satellite unit to U.S rocket-maker Alliant Techsystems ATK.N. MDA shed C$4.00, or 8.5 percent, to C$42.85.

Forzani Group FGL.TO said fourth-quarter profit rose 36 percent but its stock fell as the market worried about its slow sales for the start of the first quarter. Shares of the sporting goods retailer were down 44 Canadian cents, or 2.5 percent, at C$17.15.

Market volume was 362 million shares worth C$7.1 billion. Advancers outpaced decliners 858 to 687. The blue chip S&P/TSX 60 index .TSE60 closed up 9.61 points, or 1.19 percent, at 819.77.

In New York, stocks rose after a brokerage upgrade of computer chip makers lifted tech shares. The Dow Jones industrial average .DJI closed up 54.72 points, or 0.44 percent, at 12,581.98, while the tech-heavy Nasdaq composite index .IXIC rose 29.58 points, or 1.27 percent, to 2,351.70.

($1=$1.02 Canadian)

Editing by Rob Wilson

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