CANADA STOCKS-TSX surges on brighter Greek hopes, ECB rate cut

Thu Nov 3, 2011 4:54pm EDT
 
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 * TSX up 226.59 points, or 1.9 percent, to 12,468.35
 * Optimism on Greece helps drive gains
 * Canadian Natural up 9 pct after earnings report
 * Analysts await U.S., Canadian payrolls data
 (Adds further analyst comment, detail)
 By Jon Cook
 TORONTO, Nov 3 (Reuters) - Toronto's main stock index
closed up more than 1 percent for a second straight session on
Thursday, spurred by Greece's reversal on a euro zone bailout
referendum and a surprise interest rate cut by the European
Central Bank.
 After a call for his resignation by opposition party
members, Greek Prime Minister George Papandreou softened his
stance to hold a confidence vote on the country's euro zone
rescue fund, lifting the mood across global financial markets.
[MKTS/GLOB]
 "If there's no referendum then that suggests the plan that
the euro zone leaders put into effect last week will move
forward," said Kate Warne, Canadian market strategist at Edward
Jones in St. Louis, Missouri. "That clearly was taken as a
positive by the markets."
 Markets have been highly susceptible to large swings as
developments in the euro zone quickly overshadow corporate
earnings and global economic data.
 Oil and gold prices also got lift from the ECB's surprise
decision to cut its main interest rate to help tackle the debt
crisis, a move that promised to boost credit availability and
brighten prospects for commodity demand. [O/R] [GOL/] [MET/L]
 "That was a huge surprise," conceded Warne, adding it
suggests "the European Central Bank will now respond more
appropriately to conditions in Europe than what seemed to be
the case over the last few months.
 Nine of the 10 main sectors were higher, led by energy
issues, which were up more than 3 percent.
 Canadian Natural Resources CNQ.TO led the sector and
broader market higher, rising 9.3 percent to C$38.23. Suncor
Energy SU.TO was up 4.4 percent to C$33.20.
 Canadian Natural's quarterly profit rose 40 percent and
topped analyst expectations on higher output and crude price,
with the country's No. 2 oil producer forecasting a 17 percent
production rise in 2012. [ID:nL4E7M31JS]
 Strong oil prices were also cited as the main reason for a
projected 10 percent rise next year for Canadian oil and
natural gas drilling production, the Petroleum Services
Association of Canada said in its annual forecast.
[ID:nN1E7A21GF]
 The materials sector gained more than 2 percent, aided by
higher base metal and gold prices. Barrick Gold ABX.TO was
the biggest gainer, rising 2.6 percent to C$52.50.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE finished up 226.59 points, or 1.9 percent, to
12,468.35.
 The TSX ended the previous week at 12,519.51, before
plunging nearly 5 percent to 11.913.72 this week on news of the
Greek vote.
 A U.S. Institute for Supply Management report that showed
the vast U.S. services sector slowed modestly in October to its
lowest level in three months, produced a slight drag on
markets. [ID:nN1E7A20JG]
 Analysts had expected better ISM data, but were still
cheered by the employment component of the report, which
improved to its highest level since June.
 "It was actually pretty strong," said Robert Kavcic, an
economist with BMO Capital Markets, noting "it points to decent
growth and payrolls tomorrow."
 Canada also has jobs data out Friday. Analysts expect a
12,200 gain in jobs and an unemployment rate of 7.1 percent.
ECONCA
 In individual company news, shares of Yellow Media Inc
YLO.TO rose 28 percent to 44 Canadian cents after it posted a
14 percent rise in third-quarter profit. [ID: nL4E7M32VE]
 Valeant Pharmaceuticals VRX.TO rose more than 13 percent
to C$44.08 after the specialty drugmaker said it would buy back
up to $1.5 billion of its stock or debt, and that it returned
to profit on a surge in revenue. [ID: nNN1E7A20BY]
 Magna International MG.TO shares fell 2.1 percent to
C$35.23 after it reported its earnings dropped sharply, partly
due to rising costs at its European operations.
[ID:nL4E7M31OM]
 (With additional reporting by Claire Sibonney; Editing by
Jeffrey Hodgson)