May 2, 2008 / 9:04 PM / 11 years ago

UPDATE 3-Toronto stocks climb 200 pts on robust resources

(Adds details, quotes)

By Leah Schnurr

TORONTO, May 2 (Reuters) - The Toronto Stock Exchange’s main index powered more than 200 points higher on Friday, spurred on by resurgent resources and easing worries over the health of the U.S. economy.

Fertilizer company Agrium Inc. AGU.TO was the biggest net gainer after it said it returned to profit in the first quarter. Agrium shot up C$4.40, or 5.5 percent, to C$84.00.

Energy and materials companies helped fuel the surge as they benefited from a rebound in commodity prices. In the oil and gas sector, Suncor Energy (SU.TO) rose C$3.05, or 2.8 percent, to C$113.65, and Canadian Natural Resources (CNQ.TO) was up C$2.53, or 3 percent, at C$87.27. Overall, the group put on 2.1 percent.

The S&P/TSX composite index .GSPTSE closed up 214.47 points, or 1.52 percent, at 14,280.28 in an across-the-board rally. The benchmark was up 1.3 percent for the week.

The materials sector, which houses resource shares, added 2.2 percent, helped by Agrium’s advance, as well as that of Potash Corp of Saskatchewan POT.TO, which rose C$4.26, or 2.3 percent, to C$190.81.

The gold producers subindex gained 1.5 percent, with Agnico-Eagle Mines (AEM.TO) up C$1.43, or 2.3 percent, at C$63.88, while Centerra Gold (CG.TO) rose 58 Canadian cents, or 6.8 percent, to C$9.06.

Data that showed a smaller than expected decline in jobs in the United States for April calmed nerves over whether the U.S. might fall into a deep recession, and helped set a positive tone on the Toronto benchmark early in the day.

As well, the U.S. Federal Reserve and other major central banks announced further liquidity injections in an attempt to tame tightness in money markets.

“The action of the market over the last couple days is beginning to show signs that people are prepared to look over the valley a bit,” said Rick Hutcheon, president and chief operating officer at RKH Investments.

“Based on what I’m seeing here, I think we’re beginning to think that the odds of this being a shorter and shallower recession/slowdown are increasing relative to the odds that it’s going to be nasty and severe.”

Shares of Nortel Networks NT.TO slid 20 Canadian cents, or 2.3 percent, to C$8.67, after it reported a bigger first-quarter loss due to a number of charges.

Meanwhile, Research In Motion RIM.TO gained C$3.70, or 2.8 percent, to C$134.34, and helped the tech sector edge up 0.3 percent.

Air Canada’s ACa.TO shares sagged 25 Canadian cents, or 3 percent, to C$8.20 after an analyst lowered his recommendation on the stock and warned that increasingly expensive fuel could hurt the airline’s profit.

The industrials sector gained 2.2 percent, while shares of SNC-Lavalin Group (SNC.TO) added C$2.06, or 4 percent, to C$54.06 a day after the engineering and construction company swung to first-quarter profit.

Hutcheon said that the fact that earnings have been better than expected has also helped add luster to the market.

“There’s a lot of money sitting on sidelines that wants to come in here one of these days,” Hutcheon said.

Market volume was 440 million shares worth C$7 billion. Advancers outpaced decliners 1,009 to 547. The blue chip S&P/TSX 60 index .TSE60 closed up 13.83 points, or 1.66 percent, at 847.34.

In New York, the jobs data helped the Dow Jones industrial average .DJI close up 48.20 points, or 0.37 percent, at 13,058.20, while the Nasdaq edged down 3.72 points, or 0.15 percent, at 2,476.99. ($1=$1.02 Canadian) (Editing by Peter Galloway)

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