TORONTO - A late-day revival in financials helped push the Toronto stock market higher Friday as a multibillion-dollar taxpayer guarantee is expected to finally end the uncertainty around the asset-backed commercial paper market.
New York market indexes were mainly weak, failing to capitalize on a lifeline thrown to the Detroit automakers. President George Bush promised US$17.4 billion in short-term financing, saying a collapse of the car industry could send the suffering economy into a deeper and longer recession.
Toronto's S&P/TSX composite index advanced 126.65 points to 8,552.00 for a gain of 37 points this week. Wall Street's Dow Jones industrial average moved down 25.88 points to 8,579.11, putting in a similarly flat showing for the week.
"I think that the assumption was that there would be an aid package," Julie Brough, a vice-president at Morgan Meighen and Associates, said after the Bush announcement.
"But I think in the last couple of days, it had really started to become a little bit more questionable when there was more talk about a structured bankruptcy and things like that. I think the big issue here is really not even about the jobs -- I think the big issue is the debt, if they defaulted on all the debt."
The Canadian dollar fell 1.11 cents to 81.77 cents US after Statistics Canada reported the inflation rate dropped to two per cent last month, from 2.6 per cent in October, as gasoline price eased 14.4 per cent.
The TSX financial sector was up 1.3 per cent after Ottawa and the governments of Ontario, Quebec and Alberta agreed to "partner" in supporting a restructuring of $32 billion in commercial paper that has been frozen for the past 16 months. National Bank (TSX:NA), pummelled this week because of its ABCP exposure, gained $3.24 or 12.7 per cent to $28.86.
Another bright spot was Research In Motion Ltd. (TSX:RIM), up $6.59 or 14 per cent to $53.32 after the BlackBerry maker posted a 66 per cent surge in quarterly revenue to US$2.78 billion despite a jerky rollout of new smartphones. RIM also issued a jolly outlook for the holiday season and beyond.
Auto parts stocks were mixed after the Bush bailout. Magna International (TSX:MG.A), Canada's largest parts maker, rose 80 cents to $36.24 while Linamar (TSX:LNR) declined 12 cents to $3.54.
Auto shares gained in New York, with General Motors Corp. up 83 cents to US$4.49 and Ford Motor Co. up 11 cents at US$2.95, although some analysts wondered much the aid would help.
"I think that there's a lot of skepticism about how much real reform we're likely to see, particularly at GM," said Alan Gayle, investment strategist at RidgeWorth Investments in New York. "There is a lot of skepticism about whether GM is prepared to do what needs to be done."
The TSX Venture Exchange ticked 1.41 points lower to 699.04.
New York's Nasdaq composite index gained 11.95 points to 1,564.32 and the S&P 500 added 2.6 points to 887.88.
The gains came despite a decision by Standard & Poor's to cut its credit rating or outlook on 12 big international financial firms. They include Bank of America, Citigroup, Goldman Sachs, J.P. Morgan, Morgan Stanley and Wells Fargo.
The Toronto energy sector was up 0.5 per cent as the January crude oil contract, which expired at the end of the session, fell $2.35 to US$33.87 a barrel on the New York Mercantile Exchange, following the previous day's decline of almost US$4 a barrel. But the February contract moved up 69 cents to US$42.36 as the American currency strengthened.
EnCana Corp. (TSX:ECA) fell 60 cents to $53.90. Petro-Canada (TSX:PCA) was ahead 15 cents to $27.05 after a tentative settlement to end a 13-month-old lockout at its Montreal oil refinery, which has been kept running by managers.
Gold moved lower with the February contract in New York down $23.20 to US$837.40 an ounce, but the TSX gold sector rose 3.25 per cent. Kinross Gold Corp. (TSX:G) rose $1.07 to $20.75.
The industrial sector was the biggest weight on the TSX index, with Canadian Pacific (TSX:CP) down $1.48 to $39.75 while Bombardier Inc. (TSX:BBD.B) declined six cents to $4.14.
Potash Corp. (TSX:POT) fell $1.34 to $88.66 after the fertilizer giant lowered its 2008 profit guidance due to wilting demand for crop nutrients in a blighted global economy. PotashCorp also issued layoff notices to more than 900 employees.
The consumer discretionary sector boosted the TSX by the end of the day as media and retail stocks soared. CanWest Global Communications (TSX:CGS.T) advanced 5.5 cents to 45 cents, and Torstar (TSX:TS) ran ahead $1.67 to $10.02.
Rona Inc. (TSX:RON) gained $1 to $11.89 and Reitmans Canada (TSX:RET.A) rose $1.38 to $11.13.
