February 1, 2008 / 3:44 PM / 11 years ago

UPDATE 1-Toronto stocks rise on earnings, Microsoft move

(Adds details, analyst comment)

TORONTO, Feb 1 (Reuters) - The Toronto Stock Exchange’s main index rose on Friday morning, lifted by earnings from TransAlta, Sierra Wireless and Celestica as well as Microsoft’s blockbuster bid for Yahoo.

TSX tech and energy shares led the rise, emboldened by the prospect that merger activity could ramp up despite tight credit markets.

Software giant Microsoft’s (MSFT.O) $44.6-billion offer for Internet media company Yahoo YHOO.O was the banner story, a proposal that gave a boost to stock markets around the world. For details, see: [nN01391944]

“This rally may be the result of takeover activity, which is great, because it’s showing that companies have faith in the future, faith in the valuations that they’re paying,” said Glenn MacNeill, vice-president of investments at Sentry Select Capital Corp.

The S&P/TSX composite index .GSPTSE advanced 108.91 points, or 0.8 percent, to 13,264.01. It was up as much as 175 points earlier in the morning.

MacNeill noted there has been recent takeover activity in the TSX energy sector, which rose 1.3 percent on Friday.

Suncor Energy (SU.TO) climbed C$1.78 to C$96.18 despite declines in crude oil and natural gas futures.

In the tech sector, which was up 1 percent, Sierra Wireless (SW.TO) jumped C$1.29 to C$16.14 after the company’s quarterly profit beat its expectations. For details, see: [nN31366893]

Meanwhile, Celestica Inc (CLS.TO) climbed 51 Canadian cents to C$6.36 after the contract electronics manufacturer said its fourth-quarter loss shrank and its revenue was higher than expected. For details, see: [nN31627407]

Industrials added 1.9 percent and financials, which account for nearly a third of the overall index, were up 0.9 percent.

TransAlta (TA.TO) added to the positive results by swinging to a net profit in the quarter. Its stock jumped 37 Canadian cents to C$32.27.

The gold-mining subsector was higher in early action but fell sharply as the price of spot gold tumbled to below $910 an ounce. Barrick Gold (ABX.TO) was the biggest weighted loser, down C$1.06 to C$50.75.

The TSX index added 8.4 percent in the previous eight days.

$1=$1.00 Canadian Reporting by Jonathan Spicer; Editing by Peter Galloway

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