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

Tue Dec 21, 2010 5:37pm 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
 (Adds details, comments)
 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 1.59 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. The energy group 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 at C$37.52,
and Imperial Oil (IMO.TO: Quote), up 3.87 percent at C$40.30.
 Cold weather and rising expectations of growing demand from
drivers helped give gasoline support. [O/R]
 The materials group 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.
 Some of the big gold miners were left out of the advance.
Barrick Gold (ABX.TO: Quote) was down slightly, off 0.06 percent at
C$52.65, while Agnico Eagle (AEM.TO: Quote) slipped 0.22 percent to
C$77.87.
 Gold prices traded in a narrow range in holiday-thinned
conditions, firming late in the session. [GOL/]
 "I think gold is probably still the investment of choice,"
said Aaron Fennell, a senior market strategist at Lind-Waldock.
"Probably we'll see more exciting things in the gold market in
2011."
 ($1=$1.02 Canadian)
 (Reporting by Solarina Ho; editing by Peter Galloway)