August 18, 2009 / 9:03 PM / 10 years ago

CANADA STOCKS-TSX gathers strength as commodities rise

 * TSX up 142.25 points, or 1.35 percent, at 10,673.84
 * Materials, energy groups lead climb
 * RIM up 4.3 percent after RBC raises share price target
 * Market shrugs off unexpected dip in U.S. house starts  (Adds details, quote)
 By Jennifer Kwan
 TORONTO, Aug 18 (Reuters) - Toronto’s main stock index bounced higher on Tuesday as market sentiment brightened and rising commodity prices helped lift the resource-heavy index after Monday’s steep descent.
 Rising gold and oil prices boosted the index’s key materials and energy groups, up 1.8 percent and 1.9 percent respectively. [ID:nSIN440961]
 “For the Canadian market it has a lot to do with materials, with the fact that gold is up a few dollars and then crude is also up a couple bucks. Any time those two go up our market does well,” said Jennifer Radman, vice-president and associate portfolio manager at Caldwell Investment Ltd.
 Radman said the upbeat mood on Bay Street was helped by better than expected quarterly results from big U.S.-based retailers Home Depot (HD.N) and Target (TGT.N).
 “It has a lot to do with sentiment,” she added.
 Comments from Olivier Blanchard, chief economist at the International Monetary Fund, also helped brighten the mood. Blanchard said in an article the global recovery has begun, though it will take time for the economic scars to heal. [ID:nN18299934]
 The S&P/TSX composite index .GSPTSE finished the day up 142.25 points, or 1.35 percent, at 10,673.84, recovering some of Monday’s 2.9 percent tumble.
 Key gainers included EnCana Corp (ECA.TO), ahead 2.7 percent at C$56.50, and Suncor Energy (SU.TO), up 1.5 percent at C$34.94.
 Research In Motion Ltd RIM.TO RIMM.O rose 4.3 percent to C$81.49 after RBC Capital raised its share price target for the BlackBerry maker, as well as for smartphone rivals Apple Inc (AAPL.O) and Palm Inc PALM.O, citing strong growth in the sector. [ID:nBNG257671]
 The index’s big financial group rose 0.5 percent, with many banking stocks posting gains after Genuity Capital Markets lifted price targets on the shares of Canada’s big banks. [ID:nBNG395882] Toronto-Dominion Bank (TD.TO) climbed 0.48 percent to C$62.50.
 Investors bid up U.S. stocks as well, shrugging off an unexpected fall in U.S. housing starts in July. [ID:nN18415083]
 “We got a little bit oversold yesterday so we’re just bouncing back,” said Levente Mady, market strategist at Union Securities in Vancouver.
 The index dropped 316 points on Monday, battered by fears about the pace of economic recovery and the health of U.S. consumer confidence.
 The blue chip S&P/TSX 60 index .TSE60 closed 8.32 points, or 1.31 percent, higher on Tuesday at 641.90.
 ($1=$1.10 Canadian)  (Reporting by Jennifer Kwan; editing by Peter Galloway)                                      

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