CANADA STOCKS-TSX hits 3-week high despite Royal Bank dive

Fri May 27, 2011 11:00am EDT
 
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* TSX up 0.5 pct to 13,845.31, highest point since May 3

* Energy, materials lead charge higher

* RBC's profit rise shy of forecasts, shares fall (Adds details)

TORONTO, May 27 (Reuters) - Toronto's main stock index climbed to its highest point in more than three weeks on Friday morning as rallying commodity prices pushed up resource issues, overcoming a big drop in Royal Bank of Canada shares.

A deepening retreat for the U.S. dollar helped push up oil, gold and other commodity prices, sending the index's key energy and materials groups, as well as the main index, to their highest levels in more than three weeks.

Energy was up 0.8 percent, and materials gained 1.26 percent. The move was supported by diversified miner Teck Resources TCKb.TO, up 3.1 percent at C$50.66, while Suncor Energy (SU.TO: Quote) advanced 0.9 percent to C$41.47.

"The commodities certainly are driving the market today," said Michael Sprung, president of Sprung & Co Investment Counsel.

Canadian Pacific Railway (CP.TO: Quote) and Canadian National Railway (CNR.TO: Quote), were also key advancers, reflecting optimism about the economy. Railways are often a barometer of the health of economy because their operations reflect economic activity.

"There seems to be a general sense that the economy continues to muddle along here," Sprung added.   Continued...