April 2, 2008 / 11:55 PM / 11 years ago

UPDATE 3-Toronto stocks get lift from rallying resources

(Adds details, quotes)

By Leah Schnurr

TORONTO, April 2 (Reuters) - The Toronto Stock Exchange’s main index climbed for a third successive day on Wednesday, fueled by resource shares that benefited from a sharp rally in commodity prices.

But the benchmark eased from the day’s highs, as financial shares retreated on profit-taking following two days of strong gains.

A surge in oil and gold prices, key underlying commodities for the resource-heavy TSX, helped push mining and energy companies higher. Suncor Energy (SU.TO) gained C$2.27, or 2.3 percent, to C$100.80, while Goldcorp (G.TO) rose C$2.09, or 5.5 percent, to C$40.39.

The energy and materials sectors rose 1.4 percent and 2.5 percent respectively. Oil bolted almost $4 higher to $104.83 a barrel, while gold rose as high as $898.60 an ounce.

The S&P/TSX composite index .GSPTSE closed up 73.42 points, or 0.55 percent, at 13,514.14 with seven of its 10 main sectors on the upside. Earlier in the day, it had climbed as high as 13,598.26.

The heavyweight financial sector gave up early gains and ended down 0.8 percent. National Bank of Canada (NA.TO) was off C$1.24, or 2.5 percent, at C$48.35, while Canadian Imperial Bank of Commerce (CM.TO) slipped C$1.50, or 2.2 percent, to C$67.40.

The sector, which has been stung by continuing fallout from the credit squeeze, gained nearly 6 percent over the previous two sessions as investors hoped the problems battering financial markets were easing.

“There’s this classic fight between the financials and the credit crunch on who’s winning that one, and some days you’re getting big snap-back moves on some of these financials,” said Andrew Martyn, portfolio manager at Davis-Rea.

“You can see banks from their despair levels in Canada have snapped-back quite firmly” and some short-term holders took the opportunity to lock in profits, he said.

On the earnings front, clothing retailer Lululemon Athletica LLL.TO posted an unexpectedly big jump in fourth-quarter profit, but its stock finished off 75 Canadian cents, or 2.3 percent, at C$31.35.

Research In Motion RIM.TO was one of the day’s biggest laggards by weight, giving up C$2.47, or 2.1 percent, to C$117.63. After the closing bell, the BlackBerry maker reported better-than-expected fourth-quarter results along with a rosy outlook.

Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management Ltd., in Calgary, Alberta, said that the Toronto index could be facing a serious technical barrier as it nears the 14,000 mark.

“As we start closing in on 14,000, it starts to get very interesting because the market has had really significant difficulty getting through that level on at least three occasions, if today is going to be the third,” Kerkovius said.

“(It’s) very hard to say what it’s going to do, but it looks like again it’s starting to weaken here, so I’m getting concerned that we’re not quite done yet.”

Market volume was 456 million shares worth C$7.6 billion. Advancers outpaced decliners 870 to 701. The blue chip S&P/TSX 60 index .TSE60 closed up 3.94 points, or 0.5 percent, at 793.88.

In New York, stocks slid after U.S. Federal Reserve Chairman Ben Bernanke said a recession was possible. The Dow Jones industrial average .DJI closed down 45.44 points, or 0.36 percent, at 12,608.92, and the Nasdaq Composite Index .IXIC edged down 1.35 point, or 0.06 percent, to 2,361.40.

$1=$1.01 Canadian Editing by Peter Galloway

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