CANADA STOCKS-TSX trims August losses with bank-driven rally

Wed Aug 31, 2011 5:34pm EDT
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 * TSX rises 133.99 points, or 1.06 percent, to 12,768.70
 * CIBC climbs on stronger-than-expected results
 * Banks lead gains, financial sector up 2.1 percent
 * Optimism about further Fed stimulus buoys sentiment
 By Trish Nixon
 TORONTO, Aug 31 (Reuters) - Toronto's main stock index rose
for a fourth straight day on Wednesday, trimming August's sharp
losses, as strong results from one of Canada's big banks helped
lift the heavyweight financial sector.
 Canadian Imperial Bank of Commerce  CM.TO reported a
higher-than-expected profit on strong wealth management and
markets-related revenue, and raised its dividend by 3.4
percent, sending its shares up 4.6 percent to C$76.40.
 "CIBC, which had for many years stumbled along relative to
some of the other banks, has posted record and much better than
expected earnings," said Brendan Caldwell, president and chief
executive of Caldwell Investment Management Ltd.
 "That's really lifted that entire sector today."
 The country's five biggest lenders were the most
influential advancers on the index. Toronto Dominion Bank
TD.TO was up 2.7 percent at C$77.47 ahead of its quarterly
results due Thursday, while Royal Bank of Canada RY.TO rose
2.4 percent to C$50.12.
 Bank of Nova Scotia BNS.TO added 1.9 percent to trade at
C$54.53, extending gains from Tuesday when it reported strong
results. [ID:nN1E77T07J]
 Investors were also encouraged by a rise in global stocks,
as hopes for more U.S. stimulus drove most risk assets higher,
including economically-sensitive commodities like oil and
metals. [MKTS/GLOB]
 "There is a significant change in market sentiment," added
Caldwell, noting that markets hadn't reacted to negative
economic news, such as weaker-than-expected Canadian GDP.
 "The main rule of a bear market is that it ignores good
news. The main rule of a bull market is that it ignores bad
news, and right now the market is ignoring bad news."
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE ended the session up 133.99 points, or 1.06 percent,
at 12,768.70, the strongest close since Aug. 3.
 The four-day rally has helped the index recover most of the
dramatic losses seen in early August, when concerns about the
U.S. fiscal outlook and debt downgrade triggered some of its
biggest one-day drops in years.
 On Aug. 8 the index plunged more than 4 percent and touched
11,617.81, its lowest level since August, 2010.
 The TSX is still down 1.4 percent from the end of July, but
is up almost 10 percent from its August low.
 "Its been one of the most volatile months on record," said
Bruce Latimer, trader at Dundee Securities.
 "The last few days we've had a pretty decent rally in both
North American markets. You've got a month end today, and lot
of traders are squaring positions."
 Energy stocks rose 1.5 percent on Wednesday as Brent crude
futures rose for a seventh consecutive day, lifted by a sharp
drawdown in U.S. gasoline stockpiles. Canadian Natural
Resources CNQ.TO, up 1.8 percent at C$37.00, was among the
top gainers on the index. [O/R]
 Copper prices, driven higher by supply concerns, helped
lift base metal miners and offset losses in the broader
materials sector, which was down 0.11 percent as gold prices
slumped. [MET/L] [GOL/]    
 First Quantum Minerals FM.TO was an influential gainer,
rising 6.6 percent to C$24.09, while Goldcorp G.TO, off 0.3
percent at C$51, and Yamana Gold YRI.TO, down 1 percent at
C$15.50 were heavy decliners.
 While the index's gold subgroup was down 0.3 percent on the
day, it ended the month up more than 10 percent, lifted by a
double-digit gain in the price of the safe-haven metal, which
had its biggest monthly rise in nearly two years.
 Potash Corp POT.TO was the index's heaviest decliner, off
2.4 percent at C$56.46, followed by Bombardier Inc BBDb.TO,
down 6.8 percent to C$4.77.
 The Canadian train and plane maker sketched a gloomy
outlook for its crucial regional jet business on Wednesday as a
weak global economy cut demand, sinking its shares despite
strong profit numbers. [ID:nL4E7JV1V5]
 (Editing by Jeffrey Hodgson)