TORONTO - The Toronto stock market maintained a solid bounce late in the morning as energy shares moved higher alongside oil prices as Israeli airstrikes in Gaza went on for a third day and base metal stocks advanced after losing ground last week.
However, New York indexes were lower as investors took in a blow to Dow Chemical Co. with the collapse of a joint venture in Kuwait.
Toronto's S&P/TSX composite index was down from early levels as financials lost early momentum but was still ahead 180.5 points to 8,491.05. The main index had lost 2.8 per cent last week on tumbling energy, mining and financial stocks.
The TSX energy sector moved ahead 3.5 per cent as the February crude contract in New York was up 45 cents to US$38.16 a barrel after going as high as $42.20 as the Israeli action raised tensions in the Middle East.
"Political risk is back on the scene," said Gavin Graham, vice president and director of investments BMO Asset Management.
"You're reminded that the world is still an uncertain place and the biggest exporter of oil is right next door to this stuff."
The TSX Venture Exchange rose 28.25 points to 725.25. The Canadian dollar declined 0.69 cent to 82.01 cents US.
New York's Dow Jones industrial average fell 92.1 points to 8,423.5. The Nasdaq composite index moved 28.5 points lower to 1,501.74 while the S&P 500 index lost 11.35 points to 861.45 after Kuwait's government cancelled the US$17.4-billion K-Dow Petrochemicals venture because of the global financial crisis and low oil prices. The news pushed Dow Chemical shares 19 per cent lower.
Rohm & Haas Co. shares plunged 21.25 per cent, although the company insisted its proposed US$15.3-billion takeover by Dow Chemical won't be affected.
Notable energy sector gainers on the TSX included EnCana Corp. (TSX:ECA), up $1.22 to $52.72 while Suncor Energy Inc. (TSX:SU) rose 91 cents to $22.91.
The TSX gold sector climbed more than nine per cent as bullion gained $9.70 to US$880.90 an ounce. Goldcorp Inc. (TSX:G) moved up $3.98 to $38.53 while Barrick Gold (TSX:ABX) rose $3.89 to $44.95.
The base metals sector was up five per cent as the 2008 trading year winds to a close. with Teck Cominco Ltd. (TSX:TCK.B) ahead 40 cents to $5.43 while Sherritt International (TSX:S) advanced 16 cents to $2.90.
Dave Rovelli, managing director of trading at brokerage Canaccord Adams in New York, predicts volume will be light until the new year as investors have largely closed the books on a terrible 2008. He said investors will be focusing on the Middle East for any developments that could move markets.
"I think the market is up because everyone who wants to sell their positions for the year has. Most of their selling is done," he said. "No one is going to do anything until the new year."
The S&P/TSX composite index has plunged 40 per cent since the start of 2008 while the Dow industrials have lost 36.2 per cent, the biggest drop since 1931 when the Great Depression sent the blue-chip average reeling 40.6 per cent.
The Standard & Poor's 500 index is set to record the biggest drop since its creation in 1957, down 40.9 per cent year-to-date.
Overseas, Asian markets closed the day modestly higher. In Tokyo, the Nikkei 225 stock average edged up 0.1 per cent, while Hong Kong's Hang Seng added one per cent.
Britain's FTSE 100 rose 1.4 per cent, Germany's DAX index rose 1.25 per cent, and France's CAC-40 was flat.
