*Energy, materials boost TSX as oil, metals rise
*China’s $586 billion stimulus plan buoys commodities
*Nortel slumps after posts loss, cuts 1,300 jobs
(Adds quote, details)
By Jennifer Kwan
TORONTO, Nov 10 (Reuters) - The Toronto Stock Exchange’s main index closed higher on Monday, led by energy and materials issues, as the potential of China’s big stimulus package to boost demand for metals and oil lifted commodity prices.
The heavily weighted energy and materials groups rose 2.7 percent and 3.6 percent, respectively, as oil climbed to $62.41 a barrel [ID:nSYD393020], while gold and base metals prices were also higher. For more details, see:[ID:nLA274043]
“The Chinese government is going to spend over half a trillion dollars on various infrastructure projects in boosting the economy and a lot of that money will be spent on things like energy, steel, and copper and various other commodities,” said Levente Mady, broker at MF Global Canada in Vancouver.
“Therefore, demand for those products is going to be increasing and that’s why you’re seeing a jump across the board in commodities.”
The S&P/TSX composite index .GSPTSE closed up 92.59 points, or 0.96 percent, at 9,688.80, with four of its 10 main groups higher.
Global stock and commodity markets surged after China unveiled a plan to pump $586 billion into its economy [ID:nSP413174] as world governments took new action to remedy the global financial crisis.
The euphoria faded south of the border as markets focused again on the global economic downturn and investors worried about corporate outlooks.
“It seems financials just can’t sort of really find a happy space, not so much in Canada but more in the States,” Mady said. “It just kind of tells you the same old story that we’re not out of the woods yet as far as this financial crisis is concerned.”
The financial sector in the United States was dealt another worrisome blow as the cost of rescuing American International Group Inc (AIG.N) rose after a smaller bailout failed to stabilize the insurance giant. [ID:nN10483417]
The “big picture is we’re outperforming the U.S. market,” said Francis Campeau, broker at MF Global Canada in Montreal.
“Our financials are stronger and appetite for commodities is back on the China bailout,” Campeau said.
Nortel Networks Corp NT.TO helped to limit the index’s gains, down 26 percent at C$1.11, after North America’s biggest maker of telephone gear reported a big quarterly loss and announced a round of cost-cutting that includes laying off 1,300 more people. [ID:nN10442062]
The information technology sector slumped 2.9 percent with Research In Motion RIM.TO, down 3.8 percent at C$55.69.
Elsewhere, WestJet Airlines (WJA.TO) sank 4.9 percent to C$10.13 after it reported a slide in quarterly profit. [ID:nN10393518]
On Wall Street, the Dow Jones industrial average .DJI fell 73.27 points, or 0.82 percent, to 8,870.54, while the Nasdaq Composite Index .IXIC ended down 30.66 points, or 1.86 percent, at 1,616.74. ($1=$1.19 Canadian) (Reporting by Jennifer Kwan; Editing by Peter Galloway)