Stocks March on

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

12:50 pm EST New life was breathed into the March rally on stock markets Monday by a major deal in the Canadian energy sector and another effort to revive American banks.

The S&P/TSX Composite Index added 404.96 points by noon to 8,911.31, 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.

Suncor shares were ahead 71 cents to $31.61 while Petro-Canada soared $8.03 or 27% to $37.68.

The Toronto financial sector rose sharply on the U.S. bank-aid plan, as Royal Bank added $1.67 to $36.92 and TD Bank moved up $2.65 to $43.91.

The TSX energy sector moved ahead as advancers included EnCana Corp. up $3.93 to $55.28, and Canadian Natural Resources up $4.10 to $52.77.

The base metals sector rose as Teck Cominco Ltd. moved ahead 60 cents to $6.48 and Equinox Minerals improved 18 cents to $1.88.

The gold sector was the only declining group, although Barrick Gold Corp. climbed 56 cents to $40.81.

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 0.47 to 81.15 cents U.S.

ON BAYSTREET

Of the 13 TSX subgroups, all but one were ahead. Metals and mining led the charge, progressing 8.5%, followed by energy stocks, up 7.9%, and financials, ahead 6.8%.

Gold remained the lone holdout, tailing off 0.3%.

The TSX Venture Exchange surged nine points to 910.79, while the Nasdaq Canada Index picked up 24.59 to 455.01.

ON WALLSTREET

The Dow Jones Industrials average zoomed 309.75 to 7,588.13. The S&P 500 index gained 33.78 points to 802.32, while the Nasdaq picked up 60.04 to 1,517.31.

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.

Banks perked up on the news. Citigroup jumped 18%, Bank of America jumped 15% 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 were little changed, with the yield on the benchmark 10-year note at 2.63%

The May crude contract on the New York Mercantile Exchange moved up $1.39 to $53.46 U.S. a barrel.

The April bullion contract in New York moved down $7.40 to $948.80 U.S. an ounce.