TORONTO - The Toronto stock market roared ahead to a sixth consecutive session of solid gains as investors continued to snap up financial stocks while the energy sector also made a big contribution as crude approached the US$50 a barrel level.
A surprisingly upbeat report Tuesday on housing starts in the United States also helped New York markets get back in the groove, rising sharply after a four-day advance faltered Monday.
Toronto's S&P/TSX composite index closed up 172.89 points to 8,559.6, adding up to a 13 per cent surge over six days. The financial sector is up more than 28 per cent over that time.
"The rally is justified because (financials) have been beaten down and we're not seeing the same level of layoffs or loan losses or earnings impairment," said Paul Vaillancourt, director of asset allocation at Franklin Templeton Managed Investment Solutions.
"They warrant a second look."
The TSX Venture Exchange advanced 5.8 points to 853.12.
The Canadian dollar climbed 0.29 cent to 78.81 cents U.S. amid data showing manufacturing sales fell during January to the lowest level in almost 10 years, reflecting continued deterioration in the auto industry.
Statistics Canada said sales dropped 5.4 per cent to $41.7 billion as motor vehicle and motor vehicle parts industries, particularly in Ontario, reported record decreases during the month.
Excluding motor vehicles and parts and accessories, manufacturing sales decreased a more moderate 1.2 per cent compared with December.
New York's Dow Jones industrial average gained 178.73 points to 7,395.70, leaving the blue chip index also ahead 13 per cent since last Monday.
The Nasdaq composite index surged 58.09 points to 1,462.11 while the S&P 500 index was up 24.23 points to 778.12 as analysts said this rally could still have a good bit of momentum.
"Historically, rallies within bear markets have lasted about two months, or just over 40 business days from the establishment of a bottom," said Andrew Pyle, investment adviser at ScotiaMcLeod in Peterborough, Ont.
"Based on that, we would appear to be in the early stages of one, although... rebounds in a declining market have lasted much less, as seen last year."
The U.S. Commerce Department said Tuesday new home construction rose unexpectedly to an annual rate of 583,000 in February from a revised 477,000 in January. Building permit applications, a key measure of future activity, also rose. Applications increased three per cent to an annual rate of 547,000.
The collapse of the U.S. housing market has been one of the key drivers of the ongoing recession.
Separately, a key inflation report showed wholesale prices rose 0.1 per cent in February. The producer price index rose 0.8 per cent in January.
Shares in aluminum giant Alcoa Inc., a Dow component, dropped 53 cents or 8.65 per cent to US$5.59 after it said late Monday that it will chop its dividend to three cents a share from 17 cents a share. The move will save Alcoa more than US$400 million a year.
The TSX financial sector moved ahead 2.4 per cent as Bank of Montreal (TSX:BMO) rose 83 cents to $33.15 while Scotiabank (TSX:BNS) advanced 95 cents to $31.70.
The energy sector rose four per cent as the April crude contract in New York climbed $1.81 to US$49.16 a barrel even after OPEC decided during the weekend not to cut production to support prices.
EnCana Corp. (TSX:ECA) gained $1.45 to $51.50 while Canadian Natural Resources (TSX:CNQ) headed $2.33 higher to $50.02.
The gold sector was the only decliner, down 1.9 per cent as the April bullion contract on the New York Mercantile Exchange moved down $5.20 to US$916.80 an ounce. Goldcorp Inc. (TSX:G) faded 84 cents to $36.27 .
Telus Corp. (TSX:T) shares rose $1.19 to $34.28 as it announced it will spend $500 million from its 2009 capital budget on broadband infrastructure in British Columbia.
Potash Corp. of Saskatchewan (TSX:POT) has extended 940 temporary layoff notices to workers at its three largest mines. Its shares rose $2.56 to $98.98.
