May 18, 2010 / 2:54 PM / in 7 years

CANADA STOCKS-TSX bounces back on commodities, U.S. earnings

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* TSX up 142.61 points, or 1.2 percent, at 11,955.61

* Energy, metals, financials lead index higher

By Claire Sibonney

TORONTO, May 18 (Reuters) - Toronto’s main stock index shot higher on Tuesday morning, supported by a rebound in commodity prices and cautious optimism about the economic recovery on positive U.S. data and robust earnings.

Oil rose more than 3 percent to above $72 a barrel, recovering from a five-month low the previous session, sending the TSX’s powerhouse energy sector almost 2 percent higher. [O/R]

Suncor Energy Inc (SU.TO), Canada’s biggest oil producer, rose 2.2 percent to C$31.94, while Canadian Natural Resources (CNQ.TO) added 2.1 percent to C$72.89.

The mining sector surged almost 4 percent as industrial metals bounced from a sharp selloff. Teck Resources TCKb.TO, Canada’s biggest base-metals miner, soared 5.5 percent to C$34.92 and First Quantum Minerals (FM.TO) surged 4.7 percent to C$68.04. [MET/L]

“What we’re seeing here is just kind of a normal rebound after everything got slammed pretty badly yesterday,” said John Kinsey, portfolio manager at Caldwell Securities.

At 10:21 a.m. (1421 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 142.61 points, or 1.2 percent, at 11,955.61.

Results from U.S. retail giants Wal-Mart Stores Inc (WMT.N) and Home Depot Inc (HD.N) topped estimates, while U.S. housing starts hit a 1-1/2 year high, lifting the economically sensitive financial sector up 1.3 percent.

Shares of Royal Bank of Canada (RY.TO), the country’s biggest lender, jumped 2.2 percent to C$60.78, while no. 2 Toronto-Dominion Bank (TD.TO) gained 1.5 percent to C$73.05.

“It’s kind of all coming to together, as long as the international scene doesn’t blow up in everybody’s face.” Kinsey said referring to fears over sovereign debt contagion in Europe.

For the time being, investors took heart from promises that euro zone finance ministers hoped to clarify details of the 750 billion euro ($925 billion) plan they hatched a week ago to calm markets and stem fears of serial Greek-style debt crises in the region. [ID:nLDE64H01V] (Reporting by Claire Sibonney; editing by Rob Wilson)

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