UPDATE 3-Toronto stocks up but zeal for liquidity plan wanes

Wed Dec 12, 2007 5:26pm EST
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By Cameron French

TORONTO Dec 12 (Reuters) - The Toronto Stock Exchange's main index ended higher on Wednesday on the back of rising energy and mining stocks, but it was down from its early-session highs as initial enthusiasm for a central bank plan to boost money market liquidity waned.

Stocks surged early as investors went bargain-hunting after the previous session's sharp drop, spurred by a move by major central banks to join forces to launch short-term funding to ease credit market strains.

But the rally sputtered and stocks pared gains as nervousness returned to the market.

"I think as the day progressed investors reassessed what the implications of the central bank effort," said Elvis Picardo, investment strategist at Northern Securities in Vancouver.

The S&P/TSX composite index closed up 85.67 points, or 0.62 percent, at 13,809.38, after earlier rising as high as 13,942.04.

The central bank move came a day after the U.S. Federal Reserve disappointed markets by only trimming its key rate by a quarter percentage point, rather than a half.

"That overused term, 'roller-coaster ride', it applies today," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.   Continued...