June 5, 2008 / 9:20 PM / 11 years ago

UPDATE 4-Toronto stocks post big gain as oil pumps higher

(Adds details, quotes)

*Index ends 2 percent higher after late-day surge

*Resource groups rally along with a jump in oil prices

*MDS falls after profit drops and lowers 2008 outlook

By Leah Schnurr

TORONTO, June 5 (Reuters) - A surge in the price of oil helped the Toronto Stock Exchange’s main index vault 2 percent higher on Thursday with energy and other resource issues charging ahead.

The index’s heavyweight energy sector surged 4 percent, yanked higher as the price of oil climbed more than $5. Crude finished over $127 a barrel while the U.S. dollar weakened after the European Central Bank suggested it could raise interest rates this year.

Among the biggest gainers, Canadian Natural Resources (CNQ.TO) jumped C$6.24, or 6.4 percent, to C$103.64, while Canadian Oil Sands Trust COS_u.TO put on C$2.44, or 5 percent, to C$51.46.

Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management in Calgary, said that a better-than-expected increase in sales at Wal-Mart’s (WMT.N) U.S. stores and an unexpected decrease in U.S. weekly jobless claims also pushed oil up.

“Those sorts of things also tell you that consumption is strong and tells you that ‘demand destruction’ may not be as extreme as some people think it might be, so it’s definitely helping all the way across the materials sector,” Kerkovius said.

The S&P/TSX composite index .GSPTSE closed up 292.45 points, or 1.99 percent, at 14,982.91, helped by a nearly 100-point jump in the last hour of the session. It was the biggest one-day leap since late March.

The materials sector also threw its weight behind the rise, adding 3.3 percent, with miners caught in the upward momentum. Barrick Gold (ABX.TO) rose C$1.51, or 3.8 percent, to C$41.17, and Inmet Mining IMN.TO advanced C$1.85, or 2.7 percent, to C$69.40.

Fertilizer firm Potash Corp of Saskatchewan POT.TO added support, up C$9.84, or 4.6 percent, at C$222.34, while Agrium AGU.TO gained C$4.33, or 4.8 percent, to C$94.35.

In the oil patch, shares of Imperial Oil (IMO.TO) rose C$2.03, or 3.5 percent, to C$59.64 as the company said a water-use permit allowing construction of its Kearl oil sands project could be reissued as soon as Friday.

On the downside, medical services company MDS MDS.TO fell C$1.70, or 9.1 percent, to C$16.90 after it said its quarterly profit fell and it lowered its 2008 outlook.

The small telecoms sector was the only group in negative territory, edging down 0.3 percent. Shares of Rogers Communications (RCIb.TO) were off 64 Canadian cents, or 1.5 percent, to C$41.00.

Market volume was 410 million shares worth C$8 billion. Advancers outpaced decliners 933 to 617. The blue chip S&P/TSX 60 index .TSE60 closed up 18.52 points, or 2.11 percent, at 894.70.

In New York, stocks were pushed higher by Wal-Mart’s sales data and the jobless claims report as sentiment toward the health of the U.S. economy improved.

The Dow Jones industrial average .DJI closed up 213.97 points, or 1.73 percent, at 12,604.45, and the Nasdaq Composite Index .IXIC gained 46.80 points, or 1.87 percent, to 2,549.94.

$1=$1.02 Canadian Editing by Peter Galloway

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