Five straight jumps for TSX

Mar. 16, 2009 (Baystreet.ca) --

04:30 pm EST The stock market rally in North America extended to most indexes for a fifth day with the financial sector again providing leadership on fresh hopes the recession could end during 2009.

Toronto's S&P/TSX composite index ran up 84.84 points to 8,388.23 after a string of good news from the American financial sector pushed the main index almost 10% higher last week. The financial sector soared more than 17% after Citigroup and Bank of America reported they were profitable in the first two months of this year.

British bank Barclays PLC said Monday its operations were also improving.

Economically speaking, Statistics Canada reported that industries operated at 74.7% of their capacity in the fourth quarter of 2008, down from 78.1% in the third quarter and the lowest capacity utilization rate since the federal agency began keeping records in 1987.

The agency reports the fourth-quarter decline was driven mainly by weak domestic and foreign demand for manufactured goods.

Chris Johnson, president of Johnson Research Group in New York, noted that some short covering was still helping to boost the market, though not to the extent as it did at the beginning of the rally last week. Short covering occurs when investors who sold borrowed stock on expectations the market would fall are forced to buy shares to repay their debts.

The Toronto financial sector continued to run higher, as TD Bank climbed $2.13 to $43.31 and Manulife Financial rose $1.21 to $14.02.

Hopes that an early end to the recession would boost commodity prices sent the TSX base metals sector ahead with FNX Mining up 42 cents to $4.68 and Teck Cominco Ltd. added 33 cents to $5.37.

Industrials were also strong with Canadian National Railways up $2.14 to $44.68 and Bombardier Inc. ahead 13 cents to $2.91.

The energy sector participated in the upsurge after crude prices reversed course. Prices went as low as $43.62 U.S. during the morning in the wake of OPEC's weekend decision to maintain production at current levels. EnCana Corp. rose 71 cents to $50.30 while Petro-Canada gained 48 cents to $29.99.

Crescent Point Energy Trust units fell 26 cents to $24.32 after it reported fourth-quarter net income of $361.4 million on record quarterly production, compared to a year-earlier loss of $90.3 million.

The gold sector was off, as Goldcorp Inc. moved 79 cents lower to $37.05.

Shares in Rogers Communications Inc. were up $1.12 to $29.41 following a report that Nadir Mohamed will become the next CEO, elevating the long-time telecom executive to the position left open by the death of Ted Rogers.

Sources told the Globe and Mail the decision has been finalized internally, and an announcement on the appointment could come within the next two weeks.

Shares in convenience store chain Alimentation Couche-Tard rose eight cents to $13.05 after it reported that third-quarter profits surged 40.8% to $71.1 million despite lower U.S. fuel sales.

Uranium One Inc. had a net loss of $258.8 million U.S. in its fourth quarter, capping off a year of major losses as the company wrote down mineral interests, plants and equipment. Its shares were down three cents to $2.22.

Enbridge Inc. has agreed to sell its indirect 24.7% interest in the OCENSA pipeline to Ecopetrol, the Colombian national oil company, for approximately $400 million U.S. Its shares headed 97 cents higher to $38.32.

The Canadian dollar was down .03 of a cent to 78.56 cents U.S.

BAYSTREET

Of the 13 TSX subgroups, 10 were in negative territory; a 4.7% hike for the metals and mining sector proved a great start to the week. Financials were next highest at 2.6% and industrials surged 2.4%.

Of the three laggards, gold suffered the most, 1.3%, followed by materials, down 0.7% and information technology, sliding 0.4%.

The TSX Venture Exchange was off 1.7 points to 847.32, while the Nasdaq Canada index faded 7.75 to 401.08.

ON WALLSTREET

The Dow Jones Industrials average slid seven points to 7,216.97, putting an end to the big board's winning streak at four. The S&P 500 gave back 2.66 points to 753.89, while the Nasdaq stumbled 27.48 to 1,404.02.

Investor confidence got another boost after U.S. Federal Reserve Chairman Ben Bernanke said the United States' recession "probably" will end this year - if the government succeeds in bolstering the banking system.

He stressed that the prospects for the recession ending this year and a recovery taking root next year hinge on a difficult task: getting banks to lend more freely again and getting the financial markets to work more normally.

But there is doubt among analysts as to how long this surge can continue.

The Fed is meeting Tuesday and Wednesday to discuss interest rates, with an announcement expected Wednesday afternoon. The central bank is expected to hold the fed funds rate, its key short-term interest rate, essentially at zero.

Elsewhere on the economic front, industrial production in the states continued to decline last month, as the recession wore on. The government said production fell by a seasonally adjusted 1.4% in the month versus forecasts for a fall of 1.3%. Production fell 1.9% in the previous month.

A variety of bank stocks rallied, including Citigroup up 33% and Bank of America up 10%.

Treasury prices inched lower, raising the yield on the benchmark 10-year note to 2.95% from 2.90% Friday. Treasury prices and yields move in opposite directions.

The April crude contract on the New York Mercantile Exchange gained 87 cents to $47.12 U.S. a barrel.

The April bullion contract in New York slipped $8.10 to $922 U.S. an ounce.