CANADA STOCKS-TD's US acquisition lifts TSX to 1-week high

Tue Dec 21, 2010 5:03pm EST
 
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   * TSX up 171.87 points, or 1.3 percent, at C$13,365.15
 * Nine of the index's 10 main sectors advanced
 * Toronto-Dominion Bank up 3.74 percent at C$73.16
 (Updates to close, adds comment)
 By Solarina Ho
 TORONTO, Dec 21 (Reuters) - Toronto's main stock index
surged to a one-week high on Tuesday, finishing up more than 1
percent as Toronto-Dominion Bank's (TD.TO: Quote) $6.3 billion
purchase of Chrysler Financial helped spur a broad rally.
[ID:nN20216127]
 Weighty financial stocks climbed 1.45 percent, led by TD
Bank, which rose 3.74 percent to C$73.16. Royal Bank of Canada
(RY.TO: Quote) climbed 2.05 percent to C$51.82. Bank of Montreal
(BMO.TO: Quote), which fell in the last three sessions following its
acquisition of Wisconsin lender Marshall & Ilsley, was up 2.08
percent at C$57.78.
 "Canadian banks continue to show their confidence in
recovery in the U.S.," said Fred Ketchen, director of equity
trading at ScotiaMcLeod.
 "So the trend continues. I think more and more as this
happens, more Americans are watching and saying, 'What we've
heard with Canadian banks being in much better shape than U.S.
banks -- obviously it looks like it must be true'."
 TD Bank's cash deal will make Canada's No. 2 bank one of
North America's biggest bank-owned auto lenders. TD won't issue
any stock to fund its purchase of Chrysler Financial from
Cerberus Capital Management [CBS.UL], a feature that helped
push its shares up.
 The Toronto Stock Exchange's S&P/TSX composite index
.GSPTSE closed up 171.87 points, or 1.3 percent, at
C$13,365.15.
 Nine of the index's 10 main groups were in positive
territory. Index heavyweights such as energy stocks rallied
1.99 percent, while materials issues gained 0.94 percent.
Telecom stocks were the lone decliners, slipping a modest 0.07
percent.
 Firmer oil prices, helped by surging gasoline futures,
helped buoy Suncor Energy (SU.TO: Quote), up 2.4 percent to C$37.52,
and Imperial Oil (IMO.TO: Quote), up 3.87 percent to C$40.30.
 Cold weather and rising expectations of growing demand from
drivers helped give the gasoline support. [O/R]
 The materials group, home to miners, was bolstered by
fertilizer makers Potash Corp (POT.TO: Quote), which climbed 2.67
percent, and Agrium Inc (AGU.TO: Quote), which jumped 3.22 percent to
C$85.67.
 "They sold off over the last little while, but people are
still realizing that you need this stuff. There continues to be
growing demand for fertilizer and the world's population
continues to increase," Ketchen said.
 ($1=$1.02 Canadian)
 (Reporting by Solarina Ho; editing by Peter Galloway)