Marvelous Monday

Mar. 23, 2009 (Baystreet.ca) --

04:32 pm EST What a Monday it proved to be for equity markets in North America!

Indexes zoomed skyward on news the U.S. government is making moves to deal with weakened banks, as well as a blockbuster deal in Canada's oilpatch.

The S&P/TSX Composite Index surged 423.70 points – or nearly 5% in one day - to close trading at 8,930.05, as Suncor Energy Inc. and Petro-Canada announced a merger in an all-stock deal creating a combined company valued at $43.3 billion.

The new company is to operate under the Suncor name with existing Petro-Canada shareholders holding a 40% stake in the enterprise.

The Toronto financial sector rose sharply on the U.S. bank-aid plan, as Royal Bank added $2.24 to $37.49 and TD Bank moved up $2.94 to $44.20.

The TSX energy sector moved ahead as advancers included EnCana Corp, up $3.25 to $54.60, and Canadian Natural Resources, up $3.49 to $52.16.

The base metals sector rose, as Teck Cominco Ltd. moved ahead 59 cents to $6.47 and Equinox Minerals improved 20 cents to $1.90.

The gold sector settled back, even as Goldcorp Inc. climbed 41 cents to $42.71.

Struggling newsprint giant AbitibiBowater Inc. has extended yet again its deadline to refinance its U.S. Bowater subsidiary as it races to avoid bankruptcy protection.

AbitibiBowater said Monday a majority of the Bowater Finance II LLC debentures were tendered by Friday night's deadline but it has extended the deadline until midnight Wednesday, providing more time for the remaining debt to be tendered. Its shares fell six cents to 70 cents.

Statistics Canada's gauge of future economic activity fell 1.1% in February after a 0.9% decrease in January. The agency reported the housing and stock markets continued to post the largest declines, and manufacturing losses steepened.

The Canadian dollar was ahead 1.10 cents to 81.78 cents U.S.

ON BAYSTREET

Of the 13 TSX subgroups, all but one were in positive country, metals and mining flying 9.1% higher, financials improving 8.2%, energy progressing 6.6%.

Gold stayed the lone negative group, down 1.6%.

The TSX Venture Exchange surged 22.23 points to 924.03, while the Nasdaq Canada Index picked up 30.73 to 461.15

ON WALLSTREET

The Dow Jones Industrials average zoomed 497.48 points - or 6.8% - to 7,775.86, posting its biggest one-day point gain since Nov. 21. The S&P 500 index shot forward 54.37 points to 822.91, while the Nasdaq picked up 98.50 to 1,555.77.

The rally takes place after the Treasury Department unveiled its plan to revive lending.

It would rely on the government's $700-billion U.S. financial rescue fund, along with cheap loans from the Federal Reserve and the Federal Deposit Insurance Corp. This money would support private investors, including hedge funds, in buying toxic assets from banks at marked-down prices. The taxpayers will accept the bulk of the risk if those assets fall further.

Treasury Secretary Timothy Geithner pleaded for patience, saying work to rehabilitate the financial industry has to go forward despite "deep anger and outrage" over bad lending and investment practices.

To free up lending, the program would entice private investors with low-cost loans provided by the Federal Deposit Insurance Corp. and the Federal Reserve, and the government would shoulder most of the risk.

Bank shares led the advance. Citigroup jumped 17%, Bank of America jumped 18% and Wells Fargo gained 11%.

There was a bit of good news from the American housing sector. The National Association of Realtors said sales of existing homes grew 5.1% in February compared with January. It was the largest sales jump since July 2003, against expectations of a decline.

Treasury prices dipped, raising the yield on the benchmark 10-year note to 2.64%, up from 2.63% late Friday. Treasury prices and yields move in opposite directions.

The May crude contract on the New York Mercantile Exchange moved up 78 cents to $52.85 U.S.a barrel.

The April bullion contract in New York moved down $3.70 to $952.50 U.S. an ounce