Toronto stocks make gains

The Toronto Stock Exchange's benchmark index finished a zigzag session 200 points higher on Friday as investors spooked by the credit crisis were soothed by the US Federal Reserve's surprise cut to the discount rate at which it lends money to banks.
The S&P/TSX composite index rose 200.88 points, or 1.56 percent, to close at 13,049.58. It lost 200 points on Thursday and was down 3 percent for the week. The index swung wildly on Friday, spiking almost 400 points higher at the open before turning negative later in the morning - only to swing more than 100 points higher just 10 minutes later.
The Fed's discount rate cut assuaged fears that the US central bank would stand on the sidelines while the credit and liquidity crisis gripping world financial markets continued unabated, observers said.
"The cavalry has ridden over the hill," said Gavin Graham, chief investment officer at Guardian Group of Funds. "There are many more shoes to drop, but you know that the central banks are on it."
The Toronto rally was broad, as every one of the benchmark's 10 main groups advanced. Energy added 1.61 percent, financials rose 2.04 percent and resource-heavy materials added 0.63 percent. The S&P/TSX 60 index of Canadian blue chip names rose 12.92 points, or 1.74 percent, to 757.10.
Kate Warne, Canadian market strategist at Edward Jones, said the US rate cut shored up investor confidence in the face of turmoil. "I think investors may take any bad-news announcements with a bit more confidence that things aren't going to be allowed to spiral out of control," she said. Shares of big Canadian banks rose in the absence of bad news from financial services firms caught up in the credit crunch. Canadian Imperial Bank of Commerce added C$2.17, or 2.4 percent, to C$91.96.
Royal Bank of Canada rose 60 Canadian cents, or 1.1 percent, to C$53.60. BlackBerry maker Research In Motion Ltd led the way in net gains, adding C$7.06, or 10 percent, to close at C$77.57. Retailer Canadian Tire Corp was second in line, climbing C$4.48, or 5.4 percent, to C$87.48. Despite Friday's gain, Warne said choppiness will continue to weigh on Canadian equities.