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TSX closes at highest level since Sept. 2008

TORONTO – The Toronto stock market hit a new post-recession high on Wednesday as a solid, across-the-board rally accelerated throughout the day.

The S&P/TSX composite index added 195.47 points to close at 13,148.35, with all of the main indexes in positive territory. That’s nearly 100 points higher than the previous post-recession high of 13,052.48 on Nov. 8. Prior to that, the TSX had not closed above 13,000 since September 2008.

The TSX Venture Exchange was up 14.72 points at 2,087.16.

The Canadian dollar was up 0.92 of a cent at 98.33 cents US as other global currencies also made strides against the U.S. dollar.

The January crude contract was up $2.64 at US$86.75 a barrel on the New York Mercantile Exchange. On the TSX, shares in Canadian Natural Resources gained 4.5 per cent or $1.79 to C$41.28.

The December gold contract gained $2.30 to US$1,387.30 an ounce on the Nymex. Shares in Barrick Gold Corp. (TSX:ABX) were up 38 cents at C$53.29.

The December copper contract moved up 12 cents to US$3.94 a pound. Shares in HudBay Minerals Inc. (TSX:HBM) rose four per cent, or 69 cents, to C$17.85.

The TSX, like other global markets, is starting the month on a strong note as investors put aside fears of the spread of European government debt woes and focus on positive economic data, said Serge Pepin, director at BMO Investments.

Wednesday’s close put the TSX less than 15 per cent below an all time high of 14,666.07 reached in May 2008, pulling the market into a corrective phase, he said.

“December is usually seen as a relatively good month for stocks, so we could be repeating what we’ve seen in the past,” Pepin added.

Figures showing that China’s manufacturing boom accelerated in November were good news for Canadian stocks and the commodity market, Pepin said, as the better than expected figures sustain hopes that the world’s second-largest economy continues to grow strongly.

Robust Chinese growth means strong demand for commodities like oil, which is of particular interest to investors on the resource stock-heavy Toronto stock market.

Strong economic data from China and the U.S. proved to be a welcome relief to investors, who have for days only been interested in one thing — whether Europe’s debt crisis, which has already seen Greece and Ireland bailed out, will spread to other euro countries, notably Portugal, or more dangerously Spain.

However, Colin Cieszynski, a market analyst at CMC Markets Canada, warned that while today’s trading may be seen as encouraging, its important to note that sentiment can reverse just as quickly should negative surprises arise or expectations fail to be met.

“The strength of today’s rally suggests that sentiment could be bordering on euphoric and could lead to sharp disappointment should things not go as speculated,” he wrote in a note.

On the TSX, mining stocks were the most significant advancers, up a robust four per cent, followed by the energy, health-care and financial sectors.

Investors also showed confidence in the financial sector, which was up 1.7 per cent, after National Bank (TSX:NA) became the first big Canadian bank to boost its dividend since 2007 on Tuesday after it beat expectations and reported its fourth-quarter profits grew 19 per cent from a year earlier.

The country’s sixth-largest bank raised its quarterly dividend by four cents to 66 cents per share. Shares in the bank were $1.04 higher at $66.62.

The other Canadian banks will report earnings later this week.

Elsewhere, a number of reports said Rogers Communications (TSX:RCI.A) was in talks to acquire majority ownership of the legendary Toronto Maple Leafs and a parcel of other major-league sports franchises in a deal worth $1.3 billion. Rogers shares lost 10 cents to $36.19.

Research In Motion (TSX:RIM) is suing the makers of Kik Messenger, a free instant chat app that quickly went viral and acquired a million users in two weeks, for breaching contractual obligations. RIM shares lost 42 cents to $62.83.

Sherritt International Corp. (TSX:S) says it has reached an agreement with a subsidiary of Rio Tinto Ltd. to acquire a 57.5 per cent equity interest in the Sulawesi nickel project in Indonesia. Shares in the miner were up 19 cents at $8.09.

Contract drug developer Patheon (TSX:PTI) said Wednesday it has let president and chief executive Wesley Wheeler go. Shares were up nine per cent or 17 cents to $2.20.

U.S. stocks also made healthy gains Wednesday, rebounding from three consecutive negative sessions as investors were upbeat about several new economic reports.

The Dow Jones industrial average was up 249.76 points at 11,255.78 and the Nasdaq composite index added 51.20 points to 2,549.43. The S&P 500 moved 25.52 points higher to 1,206.07.

The U.S. Labour Department revised its summer report on the productivity of U.S. workers to an annual rate of 2.3 per cent, an improvement over an initial estimate of 1.9 per cent.

Also on Wednesday, ADP Employer Services, a payroll company, said small businesses added the largest amount of workers in three years, well ahead of what analysts had forecast.

Two other reports showed U.S. construction spending rose for the second straight month in October, and U.S. factory output grew for the 16th straight month in November, though at a slightly slower pace than the previous month.

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