Toronto stocks get big lift from resources, banks

27/08/08

By Leah Schnurr

TORONTO (Reuters) - The Toronto Stock Exchange's main index jumped more than 200 points on Wednesday, as the key resource and financial sectors were lifted by commodity prices and a rally by Canadian Imperial Bank of Commerce after it reported lower than expected charges for the quarter.

Oil jumped to above $118 a barrel as Tropical Storm Gustav was expected to intensify into a hurricane that could threaten U.S. oil and natural gas production in the Gulf of Mexico.

The rise marked the third day of gains for oil prices and boosted Bay Street's heavyweight energy sector 1.9 percent. Among gainers, Canadian Natural Resources was up 3.2 percent at C$90.36.

Financials, the second biggest group, also drove the index higher after CIBC logged lower than expected charges on structured-credit investments and managed a small profit, sending its shares up 5.3 percent to C$60.10.

The S&P/TSX composite index closed up 231.58 points, or 1.74 percent, at 13,530.65 with all but one of its 10 main sectors in an upswing.

"I guess the news wasn't as brutal as people expected," said Sal Masionis, a stockbroker at Brant Securities, of CIBC results.

"They made 11 cents this quarter and that's not very exciting, but I guess people are grasping at straws," said Masionis, adding that the writeoffs were not as bad as the market had braced for.

With the newest charges, CIBC, Canada's fifth-biggest bank, has taken about C$7.5 billion in writedowns on exposure to U.S. structured finance, by far the biggest dent from the credit crisis among Canadian banks.

All the major banks rose as the heavy hitters release their quarterly results this week, culminating in reports from three institutions on Thursday, including Royal Bank of Canada , which rose 2.7 percent to C$45.30. The group gained 2.5 percent.

Gains in gold, copper and other metals strengthened the resource-laden materials sector, with Agnico-Eagle Mines rising 2.2 percent to C$60.42, while the sector overall put on 1.8 percent.

Struggling soft drink maker Cott Corp took a beating for a second day after it said customers in its retail market are turning to big national-brand rivals, which was part of the reason for the sharp cut to Cott's 2008 profit forecast, announced on Tuesday.

Cott closed down 16.6 percent at C$1.81.

Market volume was 344 million shares worth C$6.2 billion. Advancers outpaced decliners 872 to 622. The blue chip S&P/TSX 60 index closed up 15.02 points, or 1.89 percent, at 808.79.

On Wall Street, stocks were buoyed by strong data on durable goods orders and a rally in financial shares. The Dow Jones industrial average closed up 89.64 points, or 0.79 percent, at 11,502.51, and the Nasdaq composite index rose 20.49 points, or 0.87 percent, to 2,382.46.

($1=$1.05 Canadian)

(Editing by Rob Wilson)