UPDATE 3-TransAlta, resources spur Toronto stocks higher

Mon Jul 21, 2008 4:35pm EDT
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(Updates closing numbers, adds details)

* TSX rises more than 1 percent as resources climb

* TransAlta soars after takeover offer

* Banks ease from early gains to end lower

TORONTO, July 21 (Reuters) - The Toronto Stock Exchange's main index surged more than 1 percent higher on Monday, propelled by a takeover bid for TransAlta Corp (TA.TO: Quote), while resource issues climbed in tandem with commodity prices.

TransAlta was among the biggest gainers by weight after private U.S.-based firms LS Power Equity Partners and Global Infrastructure said they wanted to buy the Canadian company for C$7.8 billion ($7.8 billion).

TransAlta, which runs coal- and gas-fired power plants and renewable energy facilities in Canada and the United States, jumped C$4.86, or 15.1 percent, to C$37.11.

Bay Street's resource sectors also spurred the main index higher, as oil climbed amid worries of disruptions to U.S. offshore oil and gas production as Tropical Storm Dolly entered the Gulf of Mexico. Gold prices were lifted by oil and a weaker U.S. dollar.

The S&P/TSX composite index .GSPTSE closed up 173.23 points, or 1.28 percent, at 13,689.19 with half of its 10 main sectors looking up.   Continued...