CANADA STOCKS-TSX closes higher on hope for U.S. auto aid

Fri Dec 12, 2008 4:35pm EST
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* 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, comments and official numbers)

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 provide emergency funding to the struggling U.S. auto industry. On Thursday night, 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.   Continued...