August 27, 2008 / 3:04 PM / 10 years ago

UPDATE 2-Resources, financials send Toronto stocks higher

* Rising commodity prices help boost benchmark

* CIBC jumps higher as results surprise

* Maple Leaf shares rebound amid food recall (Adds details)

TORONTO, Aug 27 (Reuters) - The Toronto Stock Exchange’s main index rose more than 1 percent on Wednesday, powered by strength in commodity-related stocks and better than expected results from Canadian Imperial Bank of Commerce (CM.TO).

The heavyweight financial services sector jumped 1.8 percent with CIBC, Canada’s fifth-biggest bank, up 5 percent at C$59.93.

CIBC reported a 91 percent drop in third-quarter profit — its first profit in three quarters — as results were hampered by structured investments related to the U.S. residential mortgage market, but the charges were lower than many analysts had expected.

The share rise shows Bay Street felt the results weren’t as bad as expected, said Rick Hutcheon, president and chief operating officer at RKH Investments.

“I think a lot of the players were worried that CIBC would take another big writedown on some of the subprime issues,” said Hutcheon. “The fact that it was a minor writedown compared to what they’ve done in the past ... I think is being seen quite positively.”

At midmorning, the S&P/TSX composite index .GSPTSE was up 205.55 points, or 1.6 percent, at 13,504.42, with nine of its 10 main groups higher. The consumer discretionary group sank 0.2 percent.

Firmness oil and gold prices also supported the benchmark index, sending the energy and materials sectors up 2.3 percent and 2 percent, respectively.

“I think there’s a fairly strong view out there that the fourth quarter could have a rally in commodity prices and commodity stocks,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

“We’re a little bit early for that but maybe we’re getting started here.”

In the oil group, Canadian Natural Resources (CNQ.TO) rose 3 percent to C$90.19, while EnCana Corp (ECA.TO) rose 2.2 percent to C$79.29.

Among resources, Teck Cominco TCKb.TO rose 2.1 percent to C$42.24, and Agnico-Eagle (AEM.TO) jumped 2.8 percent to C$60.73.

Maple Leaf Foods (MFI.TO), whose stock has been battered in recent days, rose 2.8 percent C$8.21.

The company remains in the spotlight as more products were pulled from store shelves amid a deadly food poisoning outbreak associated with 15 deaths, and faces a series of class action lawsuits. ($1=$1.05 Canadian) (Reporting by Jennifer Kwan; editing by Rob Wilson)

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