TORONTO - The Toronto stock market surged 200 points Wednesday thanks to substantial runups in energy and base metals stocks, but gains would have been much higher if not for a big drop in BCE Inc. (TSX:BCE) shares on word its buyout is in serious trouble.
Toronto's S&P/TSX composite index gained 200.66 points to 8,643.52.
BCE shares plunged $13.10 or 34 per cent to $25.25 on news that the Montreal-based company couldn't meet certain solvency tests in its agreement to be bought by an investor group led by the Ontario Teachers' Pension Plan.
"I think people are very surprised at this stage what has derailed it," said Julie Brough, vice-president private wealth management at Morgan, Meighen and Associates.
"I think there's a lot of people that would argue that it was a bad deal from day one, and that Teachers' was paying way too much and taking on too much debt. I think the deal is dead, personally."
The telecom sector gave back more than 10 per cent with Telus Corp. (TSX:T) down 76 cents to $38.09 and Rogers Communications (TSX:RCI.B) fell 86 cents to $34.34.
In the United States., markets posted strong gains for a fourth day after President-elect Barack Obama pledged to have a plan ready for action to deal with the country's financial crisis on his first day in office.
Obama announced that former Federal Reserve chairman Paul Volcker would head a new White House panel to help create jobs and bring stability to the ailing financial system.
New York's Dow Jones industrial average moved up 247.14 points to 8,726.61 netting just over 1,400 points since last Thursday.
The Nasdaq composite closed ahead 67.37 points at 1,532.1 while the S&P 500 moved up 30.29 points to 887.68.
The TSX Venture Exchange moved up 11.43 points to 731.39. The Canadian dollar declined 0.34 cent at 81.29 cents US.
On the TSX, the energy sector was ahead 7.66 per cent as the January crude oil contract gained $3.67 to US$54.44 per barrel on the New York Mercantile Exchange. A large interest rate cut in China and news of a possible Russian output cut countered a new government inventory report showing far more crude and gasoline in storage in the U.S. than was expected.
EnCana Corp. (TSX:ECA) improved $4.35 to $56.33 while Canadian Natural Resources (TSX:CNQ) ran ahead $5.25 to $49.
The base metals sector surged 16 per cent as Teck Cominco (TSX:TCK.B) advanced $1.08 or 25.7 per cent to $5.27 and HudBay Minerals (TSX:HBM) ran ahead 45 cents or 13.8 per cent to $3.70.
Strong gains in the tech sector also boosted the TSX as Research In Motion Ltd. (TSX:RIM) moved up $4.23 to $55.
Financials gained one per cent after National Bank of Canada (TSX:NA) said it expects to take fourth-quarter charges of $237 million. Shares in the country's sixth-largest bank declined $1.40 to $39.04
Bank of Montreal (TSX:BMO) deteriorated 66 cents to $34.29, giving up most of Tuesday's modest rise in the wake of fourth-quarter results showing net income up 24 per cent from a year ago but TD Bank (TSX:TD) rose 84 cents to $41.73.
Manulife Financial Corp. (TSX:MFC) shares gained $1.18 to $20.84 after it announced it has settled a lawsuit against French bank Societe Generale over losses from Portus Alternative Asset Management Inc., a failed Canadian hedge fund company.
Garda World Security Corp. (TSX:GW) gained 50 cents or 66.67 per cent to $1.25 on the TSX -- down from $19 last spring -- after it said its armoured-car and security-guard services are "experiencing sustained performance despite the economic slowdown."
On the TSX, advances led declines 712 to 544 with 208 unchanged.
