* TSX ends up after two days of declines
* News of U.S. mortgage plan spurs late-day rally
* Financial sector off 0.8 percent, hurt by Manulife (Adds details, quote)
By Jennifer Kwan
TORONTO, Feb 12 (Reuters) - Toronto’s main stock index rose on Thursday, struggling up from a 1.7 percent drop earlier in the day, boosted partly by strength in the resource-laden materials sector.
The rally came in the last half hour of the trading day. Analysts said it was spurred by news that the Obama administration was working on a program to subsidize mortgage payments for troubled U.S. homeowners. [ID:nN12553515]
“The late surge in the TSX is directly attributable to the late surge in U.S. stocks,” said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.
“The housing situation in the U.S. is at the epicenter of this mess, so any direct relief would be positive for the markets.”
The S&P/TSX composite index .GSPTSE closed up 40.89 points, or 0.47 percent, at 8,778.78, with seven of its 10 main groups higher.
The materials sector rose 1.3 percent, helped higher by rising gold prices, while the telecom sector also provided support, up 2.6 percent.
Among heavily weighted stocks on the upside were Research In Motion RIM.TO, up 5.1 percent at C$63.05, and Telus Corp (T.TO), up 4.6 percent at C$35.04. Barrick Gold rose 1.3 percent to C$48.53.
The index dropped as low as 1.7 percent at one point and was stuck in negative territory for most of the day.
Financials trimmed losses but still ended down 0.8 percent, while the energy sector was down 0.2 percent.
The two big insurers saw their quarterly results battered by ailing markets, writedowns and the need to shore up reserves. [ID:nN12444909]
In the oil patch, Nexen Inc NXY.TO dropped 2.7 percent to C$16.97. Canada’s No. 4 independent oil explorer posted a quarterly loss, pushed down by the plunging price of crude oil and high drilling costs at some properties. [nBNG159971].
On the upside, Shoppers Drug Mart SC.TO reported a jump in quarterly profit, helped by strong pharmacy and front-of-store sales. The company said it saw sales rising through 2009, despite the slowing economy. [ID:nN12449465] Shoppers stock gained 3.5 percent to finish at C$43.00.
“It seems like the market has been stuck going sideways for the last few weeks now. Until we break out of this range we’ve got to just go with the flow,” said Levente Mady, broker at MF Global Canada, in Vancouver.
The blue chip S&P/TSX 60 index .TSE60 closed 3.36 points, or 0.64 percent, higher at 528.12. ($1=$1.24 Canadian) (Reporting by Jennifer Kwan; editing by Peter Galloway)