TORONTO - The Toronto stock market soared almost 700 points, led by a big runup in energy stocks as oil prices moved higher and investors grew confident that massive injections of government cash into the financial system was starting to thaw the credit markets.
U.S. markets were also up sharply after U.S. Federal Reserve chairman Ben Bernanke said he supported the idea of another stimulus package.
Toronto's S&P/TSX composite index jumped 688.91 points or 7.2 per cent to 10,251.4 on top of last week's 500-point gain.
New York's Dow Jones industrial average advanced 413.21 points to 9,265.43.
"We're starting to see some relief in terms of credit markets and that's really what got us into this very difficult spot to begin with," said Vincent Delisle portfolio strategist at Scotia Capital in Montreal.
"But it's earnings season and the U.S. economic data will continue to be very, very challenging."
The TSX was lifted by energy stocks as oil prices moved higher ahead of a meeting of the Organization of Petroleum Exporting Countries at the end of the week. OPEC is widely expected to cut production significantly in an attempt to support oil prices that are half of their July peak of US$147 a barrel.
The TSX energy sector rose more than 14 per cent as the November crude contract on the New York Mercantile Exchange rose $2.40 to US$74.25 a barrel.
EnCana Corp. (TSX:ECA) advanced $7.19 to $57.07.
The financial sector was ahead five per cent as Royal Bank (TSX:RY) improved $3.58 to $49.83 while CIBC (TSX:CM) was ahead $2.99 to $60.99. Financial stocks were boosted by hopes that Ottawa is set to guarantee loans that Canada's banks extend to other financial institutions.
The TSX Venture Exchange was ahead 38.82 points to 984.94, while the Canadian dollar shed 0.48 cent to at 83.77 cents U.S. ahead of the Bank of Canada's announcement on interest rates Tuesday. Economists expect the central bank to cut its key interest rates by at least a quarter-point to deal with worsening economic conditions.
The Nasdaq composite index gained 58.74 points to 1,770.03 while the S&P 500 index moved 44.85 points higher to 985.4 as Bernanke told Congress a fresh round of government stimulus is a good idea because there's a risk the country's economic weakness could last for some time.
"The market liked what Bernanke had to say, and there were hints that he's leaving the door open for further moves in terms of rate cuts or economic stimulus," said Ryan Larson, head of equity trading at Voyageur Asset Management in New York.
"And, with credit easing in slow baby steps, the market has started to realize that this is going to be a process."
Gold was up $2.30 to US$790 an ounce on the Nymex, taking the TSX gold sector ahead more than 11 per cent with Goldcorp Inc. (TSX:G) ahead $ to $ and Barrick Gold (TSX:ABX) advanced $ to $.
Base metals were also stronger as Teck Cominco Ltd. (TSX:TCK.B) added $3.24 to $26.75 and FNX Mining (TSX:FNX) jumped $1 or 17.25 per cent to $6.80.
First Nickel Inc. (TSX:FNI) fell one cent or 18 per cent to 4.5 cents after suspending production at its Lockerby mine near Sudbury due to low metal prices and the "challenging financial environment."
On the earnings front, toymaker Mattel Inc. said its third-quarter profit rose on higher sales of its Fisher-Price and American Girl brands, but results missed Wall Street expectations as expenses rose. Its shares dipped 29 cents to US$14.16.
Oilfield services provider Halliburton Co. swung to a net loss of US$21 million, due to a nearly $700-million debt settlement, but quarterly operating income topped US$1 billion for the first time and its shares jumped $2.54 to US$20.80.
On the TSX, advances beat declines 1,174 to 374 with 195 unchanged as 473 million shares traded worth $6.8 billion.
