UPDATE 2-Toronto stocks end higher as financials roar back

Wed Jul 16, 2008 4:28pm EDT
 
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(Adds details, comments, updates closing numbers)

By Wojtek Dabrowski

TORONTO, July 16 (Reuters) - The Toronto Stock Exchange's main index finished nearly 150 points higher on Wednesday as surprisingly strong quarterly results from a U.S. bank invigorated the financial sector and helped the benchmark shake off a weak showing by energy and materials issues.

Seven of the 10 main groups of the S&P/TSX composite index .GSPTSE moved higher, including financials, which surged 5.9 percent after Wells Fargo & Co (WFC.N: Quote), the fifth-biggest U.S. bank, posted results that eased investor fears about mortgage losses.

Toronto-Dominion Bank rose C$4.06, or 7.6 percent, to close at C$57.57 -- the session's second biggest net gain. National Bank of Canada (NA.TO: Quote) came in third, adding C$3.89, or 8.5 percent, to end at C$49.64.

"You're still seeing weakness in oil and weakness in the mines, but the financials powered up this afternoon," said Julie Brough, vice-president at Morgan Meighen & Associates.

Despite the positive results from Wells Fargo, she said problems in the U.S. financial system continue to cause uncertainty.

"It's very hard to run the economy effectively without a banking system running smoothly and right now in the U.S. your financial system is not running smoothly," she said.

The energy and materials groups fell 2.09 percent and 1.26 percent, respectively, as oil prices eased and also reduced the appeal of gold as a hedge against inflation.

The S&P/TSX composite index .GSPTSE rose 146.24 points, or 1.09 percent, to close at 13,503.80.

($1=$1.00 Canadian) (Reporting by Wojtek Dabrowski; editing by Peter Galloway)