INCO BID FOR FALCONBRIDGE GIVES BAY STREET A NUDGE

Toronto stocks closed slightly higher yesterday, boosted by rebounding energy shares and jump in Falconbridge Ltd. after fellow base-metals miner Inco Ltd. launched a $12-billion takeover offer.

The Standard & Poor’s/TSX composite index closed up 0.1%, or 8.35 points, at 10,620.50.

Volume was 300.96 million shares worth $5.2-billion.

Declining stocks outpaced advancers by 770 to 720.

Only three of the TSX index’s 10 main groups were higher, but a 1.64% jump in heavily weighted energy stocks and 1% boost in the materials group, kept the market above water. Mining stocks, which are a component of the materials group, were up 4.7 %.

Investors piled into base metals stocks after Inco’s friendly takeover of Falconbridge was announced.

Falconbridge (FAL/lv/TSX) climbed $3.77, or 12.2%, to $34.59, while Inco (N/TSX)

fell 29¢ to $51.61. Falconbridge did more than any other single stock to lead the market higher.

Energy stocks rose on higher oil prices after the International Energy Agency said demand would rebound by next year.

Leading the sector higher were Canadian Natural Resources Ltd. (CNQ/ TSX), which gained 4.8%, or $2.21, to $48.66, and EnCana Corp. (ECA/TSX) the country’s biggest energy stock by market capitalization, which rose 1.3%, or 77¢ , to $60.11.

Brokerage Lehman Brothers boosted its stock rating on Canadian Natural to “overweight” from “equal weight”. Stock markets in the United States ended mixed yesterday, as the blue-chip Dow Jones industrial average edged higher, but the S&P 500 slipped and the Nasdaq fell to a three-month low.

The Dow Jones industrial average was up 14.41 points, or 0.1%, to end at 10,253.17. The S&P 500 was down 2.46 points, or 0.2%, at 1184.87. The technologylaced Nasdaq composite index was down 17.83 points, or 0.9%, at 2061.09.

The Dow’s biggest boost came from International Business Machines Corp. (IBM/ NYSE), which rose 2.4%, or US$1.94, to US$83.19. Credit Suisse First Boston raised its investment rating on IBM. Citigroup upgraded IBM on Monday.

But a drop in Xilinx Inc. ( XLNX/

a maker of programmable microchips, and other semiconductor stocks cast a shadow over the Nasdaq for the second straight day. Xilinx, down 3.1% at US$22.07, extended Monday’s slide after it cut its sales estimate for the September quarter.

“We need to see a decent number of earnings coming through with good numbers before we see the market able to hold a rally,” said Larry Peruzzi, senior equity trader at The Boston Co. Asset Management, a Mellon subsidiary.

Shares of General Motors Corp. (GM/NYSE) gained after U.S. antitrust authorities said they would not oppose a plan by billionaire investor Kirk Kerkorian to increase his stake in GM. GM shares rose 3.7%, or US94¢, to US$26.42 and helped the Dow finish higher.

Alcoa Inc. (AA/NYSE) rose US19¢ to US$22.85 after the aluminum maker posted betterthanresults late Monday.