Toronto stocks bounce higher despite oil retreat

Tue Jul 8, 2008 6:21pm EDT
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By Leah Schnurr

TORONTO (Reuters) - A late-day surge pulled the Toronto Stock Exchange's main index higher on Tuesday as gains in the wider market offset a drop by energy shares, which were hit by another big drop in oil prices.

In a see-saw session, the index fell by more than 1 percent in the morning, undermined by declining commodity prices, following two days of steep losses.

The heavyweight energy sector came off its lows but was still down 1.3 percent as oil prices sagged more than $5 on a rallying U.S. dollar and easing concern over an Atlantic hurricane.

The TSX late rebound tracked a recovery in stocks south of the border, with investors scooping up recently downtrodden shares.

The decline in crude -- which has fallen nearly $10 so far this week to just over $136 a barrel -- also helped ease anxiety over rising inflation and improved hopes the Bank of Canada won't need to raise interest rates next week, said Gavin Graham, chief investment officer at Guardian Group of Funds.

The S&P/TSX composite index .GSPTSE closed up 96.97 points, or 0.71 percent, at 13,809.77 with all but two of its 10 main sectors in positive territory.

The day's rally pulled the benchmark away from official correction territory, but it remained down 8.8 percent from the all-time high it reached in early June. A "correction" is generally defined as a 10 percent retreat from peak levels.

Levente Mady, broker at MF Global Canada in Vancouver, noted that worries over global economic growth will remain a major headwind.   Continued...