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By Leah Schnurr
TORONTO, Jan 24 (Reuters) - The Toronto Stock Exchange’s main index was strongly higher on Thursday, pulled up by gains by Potash Corp of Saskatchewan POT.TO and robust resource issues amid firm commodity prices.
The index also reaped continued benefits from interest rate cuts in the United States and Canada earlier in the week, while investors were hopeful of another U.S. rate cut next week.
Potash Corp of Saskatchewan POT.TO climbed C$8.05, or 6.6 percent, to C$129.93 after the world’s largest fertilizer producer doubled its fourth-quarter profit and gave a bright forecast for 2008.
The index has swung wildly this week, spanning a range of almost 1,000 points, following a big five-day slump that was sparked last week by intensifying fears of a U.S. recession.
“Things were overdone, it was really time for some sort of bounce from our extraordinary decline,” said Douglas Davis, president at Davis-Rea.
The S&P/TSX composite index .GSPTSE closed up 249.87 points, or 1.97 percent, at 12,907.27 with all but two of its 10 main sectors in positive territory.
The materials sector led the way up, gaining 4.7 percent, and the energy group rose 3.1 percent as oil climbed due to a tentative deal on a U.S. economic stimulus package, which helped ease recession fears.
Canadian Natural Resources CNQ.TO was up C$2.29, or 3.8 percent, at C$63.26, and Suncor Energy SU.TO added C$4.78, or 5.6 percent, to C$90.50.
The gold producers’ subsector rallied 4.2 percent, boosted by a surge in the price of bullion as the U.S. dollar weakened.
NovaGold Resources NG.TO gained 89 Canadian cents, or 8.3 percent, to C$11.65, and Kinross Gold K.TO pushed up C$1.77, or 8.5 percent, at C$22.67.
Research In Motion Ltd RIM.TORIMM.O, maker of the BlackBerry, closed up C$5.19, or 5.8 percent, at C$95.31, after the company’s chief executive said he expects limited “negative effect” from U.S. economic issues.
The index has finished higher in three out of four sessions so far this week, including a 500-point surge on Tuesday. It has gained back almost half of the more than 1,500 points it lost in its five-day nosedive, but it is still down almost 7 percent since 2008 began.
“Clearly the market would like to see a string of positive days - two, three, four days - to get the confidence to come back in, but there’s not a lot of conviction out there,” said Irwin Michael, portfolio manager at ABC Funds.
“People are quite concerned that you buy something today, it’s down tomorrow.”
Concerns over the prospect of a U.S. recession and what that could do to global economic growth and demand for resources is a major obstacle for the resource-laden Toronto benchmark index.
In a investor conference call, Paul Taylor, chief investment officer at BMO Harris Private Banking, said the recent slump was “probably warranted given the concern for whether the U.S. hardlands or not, because it will have an impact on commodity prices.”
But, Taylor added, “Whatever downside we do have, we do not believe this has the look and feel of more prolonged, sustained bear market.”
Market volume was 484 million shares worth C$9.1 billion. Advancers outpaced decliners 1.197 to 480. The blue chip S&P/TSX 60 index .TSE60 closed up 13.67 points, or 1.84 percent, at 757.64.
In New York, stocks were boosted by the tentative economic stimulus package as well as a solid outlook from Qualcomm Inc QCOM.O. The Dow Jones industrial average .DJI finished up 108.44 points, or 0.88 percent. at 12,378.61, and the Nasdaq Composite Index .IXIC rose 44.51 points, or 1.92 percent, to 2,360.92.
$1=$1.00 Canadian Editing by Peter Galloway