Is the bottom a memory?

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

04:35 pm EST The rally on the Toronto stock market picked up momentum Thursday after two down days, rising on favourable U.S. news along with stronger oil and metal prices.

New York indexes also advanced after there was strong interest in the U.S. government's latest debt auction. That came after tepid demand for Treasury notes the day before had raised doubts about Washington's ability to finance its huge economic stimulus and financial bailout programs.

The S&P/TSX Composite Index closed the day 193.48 points to the good, finishing up at 8,990.92 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 as EnCana Corp. climbed $1.84 to $54.96. The company and U.S.-based ConocoPhillips are seeking approval to more than double the output of their Christina Lake oilsands venture over the next decade. Suncor Energy Inc. was up $1.55 to $29.97.

The Toronto base-metals group rose, with copper gaining five cents to $1.85 U.S.a pound on the Nymex. Teck Cominco Ltd. advanced 45 cents to $7.65 and HudBay Minerals improved 45 cents to $6.29.

The TSX financial sector gained, with Manulife Financial ahead 64 cents to $15.52 while Royal Bank added 62 cents to $37.44.

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 four cents to $4.63.

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

Magna International Inc. rose $1.19 to $35.78 after it declined an offer of U.S. federal loans to keep a Syracuse, N.Y. auto parts plant open. Magna says money isn't the only issue and the plant is uncompetitive.

The Canadian dollar had gained 0.19 to 81.37 cents U.S.

ON BAYSTREET

Of the 13 TSX subgroups, 11 ended the day in positive territory, led by metals and mining, up 4.6%. Information technology was ahead 3.8%, industrials up 3.6%

Only a 1% drop by health-care stocks and a half-percentage-point setback for utilities kept it from being unanimous.

The TSX Venture Exchange increased nearly 25 points to 974.02 while the Nasdaq Canada Index picked up 17.38 to 466.66.

ON WALLSTREET

The Dow Jones Industrials average marched on triumphantly, gaining 174.75 points, to end the session at 7,924.56, drawing additional support from an upbeat report from Best Buy Co. and better-than-expected economic data.

The S&P 500 index gained 18.97 points to 832.85, while the Nasdaq rocketed 58.05 points to 1,587

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 nearly 25% 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.

The advance was broad based, with 23 out of 30 Dow issues climbing, led by General Motors, Hewlett-Packard, Intel and American Express. But other big bank stocks were flat to lower, putting a cap on blue-chip gains.

HP and Intel were typical of a strong tech sector Wednesday. Best Buy 's better-than-expected earnings report fired up the retail sector. Best Buy reported a 23% drop in fiscal fourth-quarter earnings versus a year earlier. Excluding charges, the retailer earned $1.61 U.S. per share, versus economists' forecasts for $1.40 U.S. per share.

The company also forecast full-year earnings in a range of $2.50 U.S. to $2.90 U.S. per share versus estimates for a gain of $2.45 U.S. per share. Shares rallied 15% in the morning.

General Motors said that 7,500 union workers, or 12% of its U.S. factory workforce, took its latest buyout offer as it continues to cut costs in an effort to gain additional federal aid money. GM gained 14%.

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.

Treasury prices rose, lowering the yield on the benchmark 10-year note to 2.73% from 2.79% Wednesday. Treasury prices and yields move in opposite directions.

U.S. light crude oil for May delivery rose $1.38 to $54.15 U.S. a barrel.

COMEX gold for May delivery rose $3.20 to $939.90 U.S. an ounce.