UPDATE 5-Toronto stocks pulled higher by resource rally

Mon Jan 28, 2008 5:07pm EST
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By Leah Schnurr

TORONTO Jan 28 (Reuters) - The Toronto Stock Exchange's main index overcame early losses to end higher on Monday, boosted by resource shares and expectations of another U.S. interest rate cut later in the week.

After the index fell more than 100 points in the morning, strong resource shares helped pull it back up, with the resource-heavy materials sector gaining 2.1 percent and its gold-producers subsector up 1.7 percent.

Barrick Gold ABX.TO rose C$1.28, or 2.4 percent, to C$53.77, and Yamana Gold YRI.TO was up 76 Canadian cents, or 4.9 percent, at C$16.46, as the price of bullion touched a record high.

Also in the resource group, Potash Corp of Saskatchewan POT.TO climbed C$6.22, or 4.6 percent, to C$140.20.

The financials sector, the biggest on the index, also contributed to the rally, adding 0.9 percent, as investors were optimistic the U.S. Federal Reserve would cut interest rates again on Wednesday.

The S&P/TSX composite index .GSPTSE closed up 92.08 points, or 0.71 percent, at 12,986.91, pulled higher in a late-day rally. Six of the TSX's 10 main sectors ended in positive territory.

Last week, an emergency rate cut by the Fed, plus a smaller cut by the Bank of Canada in its scheduled rate announcement, helped pull the Toronto index out of a massive five-day slump.   Continued...