Oil buoys Toronto stocks, pushes N. Y. blue chips lower

Gold and energy issues fly higher Dow index sheds 0.5% in New York

Toronto stocks pushed sharply higher yesterday, propelled by resource issues, which recovered from a two- day slump as gold and oil prices leapt. The Toronto Stock Exchange’s S& P/ TSX composite index closed up 107.21 points, or 0.99 per cent, at 10,932.41. Volume was a healthy 264.6 million shares worth $ 4.4 billion.

Markets south of the border headed in the opposite direction on concerns over the impact of high oil prices on consumer spending and corporate profits.

In New York, the Dow Jones industrial average was down 52.54 points, or 0.50 per cent, at 10,544.90. The Nasdaq composite index fell 22.42 points, or 1.03 per cent, to 2,149.33. The energy and materials sectors led the Toronto rally with gold- mining stocks, part of the broader materials group, soaring nearly 4 per cent as bullion prices rose on weakness in the United States dollar.

Spot gold ended at $449.80 ( U. S.) an ounce on the New York Mercantile Exchange, up $ 3.70.

“Bullion’s close to a 17- year high, and the stocks that have been laggards at long last look to be breaking out of their trading patterns, and so you’re getting an explosive move in the index,” said John Ing, president of Maison Placements Canada. “ Our sense is that, at least in the near term, there’s another 10 per cent move in the gold index coming.”

Meanwhile, crude oil prices rose $ 1.98 a barrel to settle at $65.09 after a weekly report showed U. S. stockpiles tumbled more than expected.

Overall, eight of the TSX’s 10 main subgroups were higher.

Crude- oil inventories fell 6.6 million barrels to 308.4 million in the week ended Sept. 9 from the previous week, according to the United States energy department’s weekly report yesterday. Crude supplies are still about 11 per cent higher than a year ago.

Gasoline inventories rose 1.9 million barrels to 192 million, about 7 per cent lower than year- ago levels. Distillate supplies, including heating oil, fell 1.1 million barrels to 133.3 million, more than 3 per cent higher than a year ago.

Meanwhile, reports continued to trickle in of hampered recovery efforts in the Gulf of Mexico after Hurricane Katrina.

Oil producers are scrambling to find their way around damage to key pipelines and an onshore storage facility that threatens to bottle up their output indefinitely. Owners of giant deepwater platforms are ready to start pumping oil but cannot get their crude ashore because of the obstacles, company officials say.

“ The ability to return production from our deepwater fields in the eastern gulf is dependent on the offshore transportation systems and onshore infrastructure,” said BP PLC spokeswoman Ayana McIntosh-Lee. She said options being considered include using barges and tankers and bypassing primarily third- party operated pipelines. On the TSX, the energy sector rose 2.5 per cent. EnCana Corp., Nexen Inc. and Suncor Energy Inc. all rose more than 3 per cent. The materials group added 1.2 per cent, driven by gold stocks which gained 3.89 per cent. On the downside, the tech sector fell 1.55 per cent, led by Nortel Networks Corp., which dropped 15 cents ( Canadian), or 3.87 per cent, to $ 3.73.