Key index climbs past 11,000 mark on Toronto market

First breach of level in five years Wall Street loses on rate concerns

Canada’s benchmark stock index closed above the 11,000point mark for the first time in five years yesterday, as crude- oil prices shot past $67 ( U. S.) a barrel and fuelled gains in the Toronto Stock Exchange’s energy sector.

It was also a banner day for the dollar, which hit a 131⁄ year high after topping 85 cents ( U. S.). On Wall Street, however, United States barometers declined on the eve of the Federal Reserve Board’s announcement today on interest rates.

Toronto’ S& P/ TSX composite closed up 34.14 points at 11,024.73, after first flirting with the 11,000- point mark on Friday. The index, which has jumped nearly 20 per cent this year, has an all- time closing high of 11,388.82, achieved Sept. 1, 2000, before the technology bubble burst.

Traders have credited a steady rise in energy and commodity prices for fuelling the TSX’s strong performance this year.

“ When people get comfortable with the notion of oil at these levels, then stock valuations may also advance,” said George Vasic, market strategist for UBS Securities Canada Inc. in Toronto. “ Oil- company earnings will stay strong and returns on equity will be high.”

Energy shares rose 2.3 per cent as a group yesterday. Buoyed by record oil prices, the measure has gained the most among 10 industry groups in the S& P/ TSX this year, advancing 66 per cent. Thanks greatly to energy, the S&P/TSX has had a “ tremendous year,” said Pat McHugh, portfolio manager with MFC Global Investment Management.

“ In the last three months alone, the TSX is up 10 per cent — and that’s usually considered quite a good year for equity markets.” The TSX Venture Exchange moved up 23.28 points to 2,069.8. On Wall Street, however, the Dow Jones industrial average declined 84.31 points to 10,557.63. The Nasdaq composite index was down 15.09 points at 2,145.26. The Standard & Poor’s 500 index declined 6.90 points to 1,231.02.

In Toronto, Calgary- based EnCana Corp. marked a major milestone as the company’s stock- market capitalization exceeded $ 51.3 billion ( Canadian), making the company the most valuable on the main index. The Royal Bank of Canada had previously held the top spot.

EnCana’s shares gained $ 2.09 to $ 62.10.

Advancing issues beat decliners 787 to 734 with 194 unchanged.

Toronto market volume was 333 million shares worth $ 4.55 billion.

Wall Street, meanwhile, was uncertain about what the Fed’s decision on interest rates was likely to be, but some analysts were predicting the central bank will continue lifting rates to stem inflation and will keep that as the main priority despite the widespread economic ripple left in Hurricane Katrina’s wake.

“ I don’t see where they’re going to be able to back down with inflation increasing the way it is and oil rising,” said Bill Groenveld, head trader at vFinance Investments. He said Tropical Storm Rita was another concern for the market.