TORONTO - The Toronto stock market again rallied Monday with gains again led by banks and insurance companies as fresh hopes the recession could end during 2009 extended sharp gains to a fifth day.
However, momentum dramatically slowed during the final hour in New York, where investors turned cautious and indexes closed lower after four days of solid gains.
Toronto's S&P/TSX composite index gave up more than half of early gains but still closed up 83.32 points to 8,386.71 after a string of good news from the American financial sector pushed the main index almost 10 per cent higher last week. Financial stocks soared more than 17 per cent after Citigroup and Bank of America reported they were profitable in the first two months of this year.
British bank Barclays PLC said Monday its operations were also improving.
Investor confidence got another boost after U.S. Federal Reserve chairman Ben Bernanke said the United States' recession "probably" will end this year -- if the government succeeds in bolstering the banking system.
He stressed that the prospects for the recession ending this year and a recovery taking root next year hinge on a difficult task: getting banks to lend more freely again and getting the financial markets to work more normally.
Analysts weren't too surprised to see the rally start to run out of steam.
"This is really the third 10 per cent move, let's say within a week, that we have seen in the markets since October," observed Norman Raschkowan, chief investment officer, Mackenzie Financial Corp., adding that these are early days for the recession and there's more bad news coming along.
"We've had these very sharp one-week advances and then the market sort of gives up after a couple of weeks and starts drifting down and then something happens and it gets a bit of a jump. So far, these haven't been sustained and I would be surprised if this upward momentum is sustained."
The TSX Venture Exchange was off 1.65 points to 847.32.
The Canadian dollar dipped 0.07 cent to 78.52 cents US amid further indications of a rapidly slowing economy.
Statistics Canada reported that industries operated at 74.7 per cent of their capacity in the fourth quarter of 2008, down from 78.1 in the third quarter and the lowest capacity utilization rate since the federal agency began keeping records in 1987.
The agency said the fourth-quarter decline was driven mainly by weak domestic and foreign demand for manufactured goods.
New York's Dow Jones industrial average gave up a triple-digit advance to close down 7.01 points to 7,216.97 after charging ahead nine per cent last week.
The Nasdaq composite index also found it hard to gain traction and moved down 27.48 points to 1,404.02 while the S&P 500 index slipped 2.66 points to 753.89.
The Toronto financial sector improved by another 2.3 per cent as TD Bank (TSX:TD) climbed $1.13 to $42.31 and Manulife Financial (TSX:MFC) rose 68 cents to $13.49.
Hopes that an early end to the recession would boost commodity prices sent the TSX base metals sector ahead 4.7 per cent with FNX Mining (TSX:FNX) up 29 cents to $4.55 and Teck Cominco Ltd. (TSX:TCK.B) added 24 cents to $5.28.
Industrials were also strong with Canadian National Railways (TSX:CNR) up $1.47 to $44.01 and Bombardier Inc. (TSX:BBD.B) ahead 16 cents to $2.94.
The energy sector participated in the upsurge after crude prices reversed course, rising one per cent as the April crude contract on the New York Mercantile Exchange gained $1.10 to US$47.35 a barrel. Prices went as low as US$43.62 during the morning in the wake of OPEC's weekend decision to maintain production at current levels. EnCana Corp. (TSX:ECA) rose 46 cents to $50.05 while Canadian Oil Sands Trust (TSX:COS.UN) gained 93 cents to $23.71.
Crescent Point Energy Trust (TSX:CPG.UN) units fell 10 cents to $24.48 after it reported fourth-quarter net income of $361.4 million on record quarterly production, compared to a year-earlier loss of $90.3 million.
The gold sector was the only major decliner, down 1.65 per cent as the April bullion contract in New York slipped $8.10 to US$922 an ounce. Goldcorp Inc. (TSX:G) moved 73 cents lower to $37.11.
Shares in Rogers Communications Inc. (TSX:RCI.B) were up 84 cents to $29.13 following a report that Nadir Mohamed will become the next CEO, elevating the long-time telecom executive to the position left open by the death of Ted Rogers. Sources told the Globe and Mail the decision has been finalized internally, and an announcement on the appointment could come within the next two weeks.
Shares in convenience store chain Alimentation Couche-Tard (TSX:ATD.B) rose 15 cents to $13.12 after it reported that third-quarter profits surged 40.8 per cent to $71.1 million despite lower U.S. fuel sales.
Uranium One Inc. (TSX:UUU) had a net loss of US$258.8 million in its fourth quarter, capping off a year of major losses as the company wrote down mineral interests, plants and equipment. Its shares were down one cent to $2.24.
Enbridge Inc. (TSX:ENB) has agreed to sell its indirect 24.7 per cent interest in the OCENSA pipeline to Ecopetrol, the Colombian national oil company, for approximately US$400 million. Its shares headed 55 cents higher to $37.90.
