Stocks on Bay Street jumped to a higher close Friday -- as investors digested Jim Flaherty's latest economic and fiscal update while financial stocks surged ahead of next weeks wave of earnings.
The S&P/TSX composite index was up 516.85 points to 9,270.62.
Investors are assessing Finance Minister Jim Flaherty's economic and fiscal update, which provided no big stimulative spending and set up a political head-butting between the minority Conservative government and the opposition parties.
The Harper government plans to cut spending by $2 billion and sell $2.3 billion worth of public assets -- and is moving to eliminate $27 million in subsidies for political parties.
Flaherty confirmed Canada is falling into a ''technical recession'' with economic shrinkage in the current quarter and early in 2009. But he predicted the government's finances will remain narrowly in surplus.
On the corporate side -- Allen-Vanguard Corp. says its lenders have given the company another week and a half to recapitalize. The company failed to make a $10-million payment on Sept. 30, though the deadline is now Dec. 10.
Cameco Corp. is suspending production of uranium hexafluoride at its complex in Port Hope, Ont., as a result of ''unreliable and expensive'' deliveries of hydrofluoric acid.
In data news -- raw materials prices fell sharply in October for the third month in a row as fuel prices tumbled, Statistics Canada reported Friday. The agency said its raw materials price index was down 12.5 percent in October, after a 7.3 percent drop in September.
Industrial prices were unchanged from September.
Also -- Canada posted a current account surplus in the third quarter for what analysts expect to be the last time in a while as exports sagged and domestic companies earned lower profits on their investments abroad. Statistics Canada said on Friday the surplus narrowed to $5.64 billion from $8.21 billion in the second quarter. Analysts had forecast a surplus of $5.1 billion.
The Canadian dollar, meanwhile, was trading at 80.93 cents US, down 0.11 of a cent.
BAYSTREET
All of the TSX sub-groups traded higher today -- financial stocks gained 11.80 percent; real-estate issues were ahead 9.86 percent and tech stocks gained 6.43 percent.
Among the financial leaders -- Royal Bank gained $1.45 to $30.33 while Scotiabank advanced $1.55 to $34.30.
COMEX gold for February delivery rose $7.17 to $819 US an ounce.
Meanwhile, the TSX Venture Exchange rose 18.12 points to 766.35 and the NASDAQ Canada was down 15.50 points at 431.33.
ON WALLSTREET
Stocks will enter the month of December with a sense of optimism that much of the dismal environment for corporate profits has already been discounted by the market, even as upcoming reports, including the key jobs report on Friday, are expected to show the economic picture is still worsening.
The Dow Jones Industrial Average gained 102.43 points, or 1.2 percent, to 8829.04, and the S&P 500 added 8.56 points, or 1 percent, to 896.24. The Nasdaq edged up 3.47 points, or 0.2 percent, to 1,535.57.
Retailers were in focus on ''Black Friday,'' the day after Thanksgiving, the unofficial kickoff to the holiday shopping season.
Discounts are the deepest they've ever been this year, but many Americans have tightened their grip on their wallets and fewer shoppers are expected to hit the stores this year.
On the pharmaceutical front, antitrust investigators from the European Union said that Pfizer, GlaxoSmithKline and Sanofi-Aventis blocked generic drugs from the market, costing European patients as much as $3.87 billion.
General Motors has hired a real estate company to help it raise up to $257 million in sales and other deals related to its European offices and assets, according to a report by the Financial Times.
Chesapeake Energy shares dropped 15 percent to $17.18 after the company said in a filing with the Securities and Exchange Commission that it would sell 50 million shares of its stock at a discount to the previous session's closing price.
Among technology shares, billionaire investor Carl Icahn bought $66.9 million in shares of Web portal Yahoo!, bringing his stake in the company up to 5.5 percent. Shares rocketed 8.8 percent to $11.51.
Longer-dated U.S. Treasury securities were rising in price. The 10-year note was up 8/32, yielding 2.94 percent, and the 30-year was climbing 26/32, yielding 3.48 percent. The American dollar was gaining on the euro, yen and pound.
U.S. light crude oil for January delivery fell 1 cent to $54.43 US a barrel.
