Rally gathers steam

Mar. 26, 2009 (Baystreet.ca) --

12:48 pm EST Higher oil and base-metals stocks helped the Toronto stock market post triple-digit index gains Thursday morning.

New York indexes also advanced as the rally continued after data confirmed a deep slump in the American economy, but not as deep as markets had feared.

The S&P/TSX Composite Index had sprinted 147.18 points to 8,944.62 by noon

Since the rally took hold March 10, the main TSX index is up about 16% while the Dow industrials have risen 18%.

The TSX energy sector rose this morning as EnCana Corp. climbed $1.02 to $54.14 and Suncor Energy Inc. was up 91 cents to $29.33.

The base-metals group rose, with copper gaining six cents to $1.86 U.S. a pound on the Nymex.

Sherritt International moved ahead nine cents to $3.01 and Teck Cominco Ltd. advanced 46 cents to $7.66.

The TSX financial sector edged up, with Manulife Financial ahead 36 cents to $15.24 while Bank of Montreal gained 34 cents to $33.63.

Money management firm Sprott Inc.reported fourth-quarter net income of $20.4 million, down from a year-ago $27.6 million as assets under management fell 21% in three months. Its shares added one cent to $4.60.

AbitibiBowater Inc., working to avoid bankruptcy, has again extended a deadline to refinance $1.8 billion U.S. of debt held by its Bowater subsidiary in the United States. Its shares were ahead four cents to 72 cents.

The Canadian dollar had gained 0.13 to 81.32 cents U.S.

ON BAYSTREET

Of the 13 TSX subgroups, 10 remained in positive territory, led by metals and mining, up 5.8%, industrials and energy, up 2.7%

The three laggards were health-care stocks, down 0.7%, utilities, off 0.6%, and consumer staples, 0.5% lower.

The TSX Venture Exchange increased 18.14 points to 967.18 while the Nasdaq Canada Index picked up 15.11 to 464.39.

ON WALLSTREET

The Dow Jones Industrials average managed to hold onto some of its gains, finding itself 94.70 points ahead, to 7,844.51. The S&P 500 index gained 11.56 points to 825.44, while the Nasdaq tacked on 37.66 points to 1,566.61.

A better-than-expected new home sales report helped investors push stocks higher Tuesday at the end of a choppy session. It was the latest in a string of slightly better-than-anticipated news that has bolstered hopes that the economy could be closer to stabilizing.

Such signs - along with the latest initiatives from Treasury and the Fed - have propelled the S&P 500 by 20% in 2-1/2 weeks. Market pros are cautiously optimistic that the bear market saw a bottom on March 9, when the S&P 500 and Dow industrials both ended at more than 12-year lows.

One analyst says part of Thursday's optimism is fueled by the fact that the S&P has held onto levels at or near the 800 mark.

On the economic front, the U.S. Commerce Department said the economy shrank at a 6.3% annualized pace at the end of 2008.

It was the worst showing in a quarter-century, but markets had been bracing for an even sharper 6.5% decline in the government's final estimate of fourth-quarter gross domestic product.

In other data, the U.S. Labor Department said new claims for unemployment benefits last week rose to a seasonally adjusted 652,000 from the previous week's revised 644,000. The total number of people claiming benefits jumped to 5.56 million, higher than economists' projections of 5.48 million, and a ninth straight record high.

The figures indicate the American labor market remains weak even as some other economic indicators come in better than expected.

There was some positive U.S. corporate news today.

Best Buy, the world's largest consumer electronics retailer, reported fourth-quarter earnings that were down 23% from a year ago but beat analyst expectations.

Meat processor ConAgra Foods Inc. also posted a sharp drop in profits but topped expectations.

Best Buy shares jumped 15% as the report boosted hopes for consumer spending. ConAgra climbed almost 6%.

Treasury prices rose, lowering the yield on the benchmark 10-year note to 2.22% from 2.79% Wednesday. Treasury prices and yields move in opposite directions.

U.S. light crude oil for May delivery rose 78 cents to $53.55 U.S. a barrel.

COMEX gold for May delivery rose $3.40 to $940.10 U.S. an ounce.