August 28, 2008 / 1:59 PM / 10 years ago

Banks give Toronto stocks a big lift

TORONTO (Reuters) - The Toronto Stock Exchange’s main index powered to its second triple-digit gain in a row on Thursday as major banks climbed after releasing results that were not as bad as some analysts feared.

Toronto-Dominion Bank (TD.TO) was the biggest gainer by weight after it boosted its dividend, the only Canadian bank to do so this quarter.

Royal Bank of Canada (RY.TO), the country’s biggest bank, also jumped after it beat market expectations and took lower writedowns than many analysts had anticipated.

TD rose 5.4 percent to C$62.56, while Royal climbed 6.3 percent to C$48.13. The sector rallied 4.2 percent.

“There’s a signal there for the market that people are putting a lot of this financial crisis behind them, finally,” said Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management Ltd. in Calgary.

The S&P/TSX composite index closed up 219.83 points, or 1.62 percent, at 13,750.48.

Thursday rounded out quarterly results from the so-called “Big Six” banks. All of the institutions rose, including Canadian Imperial Bank of Commerce (CM.TO), which gained 4.7 percent to C$62.90. On Wednesday, it had reported smaller-than-expected charges.

Bay Street was also pushed higher by data out of the United States that showed the economy grew more quickly than first thought, at a 3.3 percent annual rate in the second quarter.

A more than $2 drop in oil prices also helped bring the broader market up, easing anxiety over the impact of high energy prices on business and consumer spending.

Oil settled down at $115.59 a barrel after the U.S. government and the International Energy Agency said emergency stockpiles will be released if Tropical Storm Gustav interrupts U.S. oil production.

“With energy coming off, even in face of a hurricane down in the Gulf, it’s putting positive tail wind behind everybody,” Kerkovius said.

The drop trimmed Toronto’s energy group by 0.2 percent, making it the only sector to fall. Canadian Oil Sands Trust COS_u.TO slipped 2.1 percent to $51.21.

But the industrials sector rose 3.6 percent, with Canadian National Railway (CNR.TO) up 3 percent at C$55.53.

Market volume was 359 million shares worth C$6.3 billion. Advancers outpaced decliners 944 to 586. The blue chip S&P/TSX 60 index closed up 12.42 points, or 1.54 percent, at 821.21.

In New York, stocks had strong gains due to the unexpectedly robust economic data and decline in oil prices.

The Dow Jones industrial average closed up 212.67, or 1.85 percent, at 11,715.18, while the Nasdaq Composite Index rose 29.18 points, or 1.22 percent, to 2,411.64.

($1=$1.05 Canadian)

Editing by Jeffrey Jones

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