BAY STREET BREAKS 11,000 FOR FIRST TIME SINCE 2000

Toronto stocks finished above 11,000 points yesterday as a sharp rise in oil prices lifted energy issues, but profit-taking in some recently top-performing sectors tempered the gains.

The Standard & Poor’s/TSX composite index rose 34.14 points, or 0.3%, to 11,024.73. The blue-chip S&P/TSX 60 index rose 3.71 points, or 0.6%, to 619.08.

“The increase in oil prices and given that the size of the energy sector is so large that for now it’s offsetting everything else,” said Patricia Croft, chief economist at Phillips, Hager & North.

The energy sector rose 2.3%, while the telecoms group was next in line with a gain of nearly 1%. Four of the TSX’s 10 main subindexes ended higher.

Energy stocks took full advantage of a surge in oil prices as Tropical Storm Rita headed for the U. S. Gulf of Mexico, while OPEC ministers appeared to favor leaving crude output unchanged for now.

Shares of EnCana Corp. (ECA/ TSX), the biggest contributor to the market’s gain, rose $2.09, or 3.5%, to $62.10, while Suncor Energy Inc. (SU/TSX) finished ahead $2.05, or 3%, to $72.30.

The materials sector dropped 1%, pulled down largely by a 2% decline in gold stocks after rising for three straight sessions.

The sector was up nearly 3% earlier in the session as bullion prices advanced beyond US$470 an ounce to a 17-year high, but investors decided to cash in on the sector’s gains before taking off for the day.

Barrick Gold Corp. (ABX/TSX) fell 63¢, or 1.8%, to $33.61, while Placer Dome Inc. (PDG/TSX) dropped 55¢ , or 2.7%, to $19.65.

U.S. stocks slid yesterday as a surge in oil prices and a possible rate increase by the Federal Reserve today raised concerns consumer spending will slow, hindering profit growth in the third quarter.

Shares of transport stocks like United Parcel Service and FedEx Corp. were hard hit, reflecting concerns about the impact of higher crude oil and gasoline prices on shipping costs and corporate profits. UPS shares (UPS/NYSE)

fell 2.5% to $67.26 and FedEx (FDX/TSX)

dropped 2.8% to $77.93.

Shares of Honeywell International Inc. (HON/NYSE) fell 2.5% to US$38.30 after the aerospace and industrial conglomerate agreed to sell Indalex Aluminum Solutions to an affiliate of private equity firm Sun Capital Partners Inc.

The Dow Jones industrial average fell 84.31 points, or 0.8%, to close at 10,557.63, after falling more than 100 points late in the session. The S&P 500 dropped 6.89 points, or 0.6%, to 1,231.02. The Nasdaq composite index fell 15.09 points, or 0.7%, to 2145.26.

“ There was no demand for stocks with all the uncertainty regarding oil prices and the Fed meeting tomorrow,” said Matthew Kelon, a fund manager at the Kelmoore Strategy Funds in Palo Alto, Calif. “It was not a surprise to see stocks heading down.”

Declines in shares of industrial conglomerates, among the most sensitive companies to high energy costs, helped drive down both the Dow and the S&P 500. General Electric Co. (GE/NYSE) fell 1.2%, or US42¢, to US$34.05, while 3M (MMM/NYSE)

dropped 1.2%, or 85¢ , to US$72.50.

Reuters