February 26, 2008 / 10:17 PM / 11 years ago

UPDATE 4-Toronto stocks boosted by strong oils, banks

(Adds details, quotes)

By Leah Schnurr

TORONTO, Feb 26 (Reuters) - The Toronto Stock Exchange’s main index pushed higher for a third day in a row on Tuesday, propelled by strong financials and rising energy shares as oil hit a record high settlement.

The oil and energy group, which accounts for about 25 percent of the index, climbed 1.4 percent as crude jumped amid a weak U.S. dollar. Oil reached a record settlement of $100.88 a barrel, up $1.65.

Canadian Oil Sands Trust COS_u.TO rose C$1.54, or 3.8 percent, to C$41.80 and Imperial Oil (IMO.TO) gained 93 Canadian cents, or 1.7 percent, to C$55.60.

The heavyweight financial sector also helped the advance, adding 1.5 percent. Canadian Imperial Bank of Commerce (CM.TO) was up C$2.09, or 3.1 percent, at C$70.19 while Toronto-Dominion Bank (TD.TO) gained 77 Canadian cents, or 1.2 percent, to C$67.81.

The S&P/TSX composite index .GSPTSE closed up 99.56 points, or 0.73 percent, at 13,797.01 with seven of its 10 main groups in positive territory.

“I think there is (enthusiasm), but I think, as investors, we have to be cautions,” said Adrian Mastracci, portfolio manager and president at KCM Wealth Management Inc in Vancouver.

“We haven’t fixed the underlying difficulties, the foundations still have some cracks in them — we just choose to ignore the fact that they have cracks at the moment,” Mastracci said.

The Toronto benchmark had earlier been pressured by the release of more negative U.S. economic data, including a jump in producer prices in January.

Private-label soft drink maker Cott Corp (BCB.TO) weighed to the downside, sliding C$1.50, or 37.5 percent, to C$2.50 after key customer Wal-Mart (WMT.N) gave notice it would cut U.S. shelf space for the company’s drinks.

Cott helped pull the consumer staples sector lower by 1 percent. Elsewhere in the sector, Shoppers Drug Mart SC.TO lost C$1.34, or 2.6 percent, to C$50.16.

Also retreating was BlackBerry maker Research In Motion, which fell C$2.65, or 2.4 percent, to C$105.80. The tech sector edged up 0.03 percent.

After the market close, the federal government unveiled its budget, which included an unexpected tax-free shelter for Canadians to put away extra money, including capital gains. However it did not live up to market hopes of reducing the capital gains tax.

“The market would have liked to have seen them move on their election promise to adjust the capital gains tax,” said Peter Chandler, senior vice-president at Canaccord Capital in Waterloo, Ontario.

“From an investment community standpoint, the introduction of this tax-free savings account was probably the biggest issue,” Chandler said. “The initiative here is obviously aimed at boosting Canada’s savings rate, and it may take some pressure off the Conservatives to address higher taxes on wealthier individuals.”

Market volume was 414 million shares worth C$7.7 billion. Advancers outpaced decliners 931 to 688. The blue chip S&P/TSX 60 index .TSE60 closed up 5.87 points, or 0.73 percent, at 809.05.

On Wall Street, stocks rose as tech companies moved higher after IBM (IBM.N) said it plans to buy back $15 billion of its shares. The Dow Jones industrial average .DJI was up 114.70 points, or 0.91 percent, at 12,684.92, and the Nasdaq composite index .IXIC gained 17.51 points, 0.75 percent, to 2,344.99.

$1=$0.98 Canadian Editing by Rob Wilson

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