December 30, 2008 / 11:03 PM / in 9 years

CANADA STOCKS-Toronto index rallies to four-week high

* Toronto stocks climb 2.24 percent in broad rally

* Telecoms, consumer issues, financials lead way

* Materials subgroup the sole loser (Adds comments, details)

By Jeffrey Jones

CALGARY, Alberta, Dec 30 (Reuters) - Toronto’s main stock index climbed to its highest level in more than four weeks on Tuesday as a broad-based year-end rally offset weakness in mining shares due to lower gold prices.

The S&P/TSX composite index .GSPTSE jumped 193.43 points, or 2.24 percent, to close at 8,830.72 in a second straight session of triple-digit gains.

With the exception of the materials group, which includes gold-mining stocks, all of the TSX’s 10 main sectors staged gains on the penultimate trading day of 2008. Telecommunications rose 4.7 percent, consumer discretionary issues gained 4.4 percent and financials climbed 3.3 percent.

It was the index’s highest close since Nov. 28, but still represents a drop of 36 percent this year due to the global economic meltdown and steep drops in commodity prices.

“One point to make, as always at this time of year, is how small the volumes are, so therefore it doesn’t take much to move it,” said Gavin Graham, director of investments at BMO Asset Management.

“On the other hand, oil and gold are off somewhat and yet you’re seeing stronger oil stocks and also financials, which are an important part of the Canadian market.”

The latter could be because of U.S. reports issued on Tuesday pointing to more economic weakness and fueling the belief that any interest rate hikes are a long way off, Graham said.

U.S. consumer confidence fell to a record low in December, as the dismal job market hurt sentiment, the Conference Board business research firm said. [ID:nN30339924]

Meanwhile, single-family U.S. house prices dropped by a record 18 percent in October from a year earlier, according to the Standard & Poor‘s/Case-Shiller Home Price Indices.

Among big Toronto gainers were Bank of Nova Scotia BNS.TO, up C$1.46, or 4.7 percent, at C$32.45, Rogers Communications RCIb.TO, up C$1.91, or 5.5 percent, at C$36.74, and Groupe Aeroplan AER.TO, up 69 Canadian cents, or 9 percent, at C$8.30.

Big-name retailer Canadian Tire Corp CTCa.TO rose C$3.97, or 9.7 percent, to C$44.92.

The materials group slipped 1 percent, with Barrick Gold ABX.TO falling C$1.23, or 2.7 percent, to C$44.11.

Gold prices sank on Tuesday as crude oil fell 99 cents to $39.03 a barrel and traders grabbed profits after the precious metal reached an 11-week high in the previous session. [ID:nLU265530]

Gold for February delivery finished $5.30, or 0.61 percent, lower at $870 an ounce in New York.

The blue chip S&P/TSX 60 index .TSE60 closed 11.96 points, or 2.3 percent, higher at 532.9.

On Wall Street, the Dow Jones industrial average .DJI rose 184.46 points, or 2.17 percent, to 8,668.39, after Washington said late Monday it would extend an additional $1 billion loan to General Motors Corp GM.N and take a $5 billion stake in the auto maker’s GMAC financing arm. [ID:nN30358085]

The Nasdaq composite index .IXIC ended up 40.38 points, or 2.67 percent, at 1,550.70.

$1=$1.22 Canadian Reporting by Jeffrey Jones; editing by Rob Wilson

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