4 Min Read
* Hope for aid to U.S. auto industry helps boost market
* TSX ends 405 points above session low
* Market finishes week with gain of 4.9 percent (Adds details and comments)
By Frank Pingue
TORONTO, Dec 12 (Reuters) - Toronto's key stock index ended higher on Friday as news that the U.S. government might throw a lifeline to troubled automakers helped steer the market clear of what was shaping up to be a big loss.
The index opened with a big fall but it started to recover after the White House said it may be willing to offer emergency funding to the struggling U.S. auto industry. Late on Thursday, the U.S. Senate turned down a rescue package for the industry.
"The auto bailout was a failure from last night, and from last night to this morning the markets were down," said Francis Campeau, broker at MF Global Canada in Montreal.
"What saved the day was the U.S. statement that basically said they will not let the auto industry down, and that kind of reignited hope of U.S. government intervention towards the car industry."
Hefty gains in both the heavily weighted financial sector and materials group were the key drivers behind the index's gain, its third in five sessions this week.
The S&P/TSX composite index .GSPTSE rose 123.55 points, or 1.47 percent, to 8,515.45, with six of its 10 subindexes ending higher. For the week, the key index rose 4.9 percent and reclaimed a piece of the 12.4 percent loss suffered last week.
Lost in the market's closing numbers on Friday was the scope of the rally it put together after stumbling out of the gate to its lowest level in a week.
Early in the session, the key index tumbled 281.77 points to 8,110.13 as investors responded to the news that the package of measures to provide aid to U.S. automakers had died in the Senate due to opposition from Republicans.
The financial group, which makes up about a third of the index, snapped a three-session losing skid and rallied 3.37 percent to help lead the index back into positive territory on hope for the auto industry.
The technology group chipped in with a 0.66 percent rise as talk in the United States that large stockpiles in cash at technology companies would help them weather the economic downturn filtered through to the Canadian market.
BlackBerry maker Research In Motion RIM.TO, another key contributor to the market's gain, rose 4 percent to C$48.49.
The materials group, which includes some of the biggest base-metals and gold-mining companies in the world, led all sectors with a 3.67 percent gain as uncertain market conditions in recent months bodes well for gold prices.
"The fact that the market came back from a weak open for a strong close provides a fairly positive tone to the market," Campeau said. "Very bullish is a bit too strong of a word, but it's a very optimistic close"
On Wall Street, investor hope for an auto bailout and the rise in technology shares helped stocks to a higher close.
The Dow Jones industrial average .DJI rose 64.59 points, or 0.75 percent, to 8,629.68, while the Nasdaq Composite Index .IXIC ended up 32.84 points, or 2.18 percent, at 1,540.72.
$1=$1.25 Canadian Editing by Peter Galloway