(Adds details, quotes)
*Index closes at record high
*Resource and financial sectors rally
By Leah Schnurr
TORONTO, May 15 (Reuters) - The Toronto Stock Exchange's main index popped up more than 1 percent on Thursday, propelled further into record high territory by strong resource and financial shares.
Inmet Mining <IMN.TO> was the biggest net gainer on the day, rising C$6.25, or 9.3 percent, to C$73.75. Fertilizer company Potash Corp of Saskatchewan <POT.TO> was also among the leaders, finishing up C$5.28, or 2.7 percent, at C$204.50.
Gold producers also jumped, benefiting from rising gold prices. Agnico-Eagle Mines <AEM.TO> was up C$3.38, or 5.3 percent, at C$67.29, while the gold subindex gained 3.6 percent.
The S&P/TSX composite index <.GSPTSE> closed up 201.75 points, or 1.38 percent, at 14,828.06 with all but one of its 10 main sectors moving higher.
The surge helped the benchmark climb further into record territory, continuing the week's trend after it broke last summer's record high on Monday.
The financials sector, the biggest group on the index by weight, rose 1.6 percent, with Toronto-Dominion Bank <TD.TO> rising 94 Canadian cents, or 1.4 percent, to C$68.51, and Canadian Imperial Bank of Commerce <CM.TO> up 83 Canadian cents, or 1.1 percent, at C$74.84.
Adrian Mastracci, portfolio manager and president at KCM Wealth Management Inc., in Vancouver, said that banks were helped by easing trepidation over what problems may be still lurking in the financial sector.
"I think as investors look at more news being disseminated, as some of the financials have reported the potential losses that they're going to take, I guess they feel that we know more of the situation," Mastracci said.
"The more they know, they more they feel better about the prospects going forward, and I think there's some of that in there today."
On the downside, FirstService Corp <FSV.TO> tumbled C$2.77, or 12.2 percent, to C$19.96 after the property services firm swung to a fourth-quarter loss as it was stung by unfavorable market conditions.
The telecoms sector was the only group in negative territory, giving up 0.2 percent.
Shares of Lundin Mining <LUN.TO> added 68 Canadian cents, or 8.8 percent, to C$8.38 after it reported first-quarter profit rose, helped by rising copper and lead prices, as acquisitions increased production.
The Toronto benchmark has climbed more than 20 percent from the lows seen in January, when it dipped below the 12,000 mark amid worries over the health of the U.S. economy and troubles in the financial and credit markets.
Since then it has been spurred higher by red-hot commodities prices, and recent optimism that the worst of the credit problems have been seen. Analysts have also noted that the current round of corporate results generally have been better than had been feared.
"We're getting to the end of earnings season and we got through this without any terribly nasty surprises," said Rick Hutcheon, president and chief operating officer at RKH Investments.
"I think that the mood of investors is probably starting to gain a little traction, and that we're starting to feel a little more optimistic that perhaps the worst of the credit issues are beginning to recede."
Market volume was 441 million shares worth C$8.1 billion. Advancers outpaced decliners 985 to 655. The blue chip S&P/TSX 60 index <.TSE60> closed up 13.14 points, or 1.51 percent, at 884.73.
In New York, stocks were up as a pullback in oil prices calmed worries about inflation. The Dow Jones industrial average <.DJI> closed up 94.28 points, or 0.73 percent, at 12,992.66, and the Nasdaq Composite Index <.IXIC> rose 37.03 points, or 1.48 percent, to 2,533.73. ($1=$1.00 Canadian) (Editing by Peter Galloway) ((leah.schnurr@thomsonreuters.com; +1 416 941 8056; Reuters Messaging: leah.schnurr.reuters.net@reuters.com))
Keywords: MARKETS CANADA STOCKS
(Recasts with sources on deal, Dodd comments, background)
By Patrick Rucker and Kevin Drawbaugh
WASHINGTON, May 15 (Reuters) - Leaders of the U.S. Senate Banking Committee have reached a deal on a broad housing rescue plan in which Fannie Mae <FNM.N> and Freddie Mac <FRE.N> would provide funds to support a federal mortgage insurance fund, two industry sources said on Thursday.
Committee Chairman Christopher Dodd, a Connecticut Democrat, said an accord had not yet been finalized, but he told reporters after a meeting of the panel, "We're getting pretty close to it ... We're down to a few issues."
Funding for the $300-billion mortgage insurance fund, to be run by the Federal Housing Administration (FHA), proved to be one of the biggest stumbling blocks during talks all week between Dodd and Sen. Richard Shelby, the committee's top Republican.
Developing a mechanism to fund the program was seen as key to getting the rescue plan out of the banking committee and to the Senate floor for final approval, although that could still be a distant prospect. Aides said Senate leaders are not yet engaged in the housing package debate.
Dodd and Shelby have also agreed on language to create a new regulator for Fannie Mae and Freddie Mac, the lobbyists said.
The Dodd-Shelby pact on financing the FHA mortgage insurance fund would see Fannie Mae and Freddie Mac direct money from a new affordable housing fund to the government's largest homebuyer aid program.
The GSEs would send 100 percent of their contributions to backstop the insurance program in its first year, 75 percent in the second year and 50 percent in the third, the sources said.
The formula was crafted by Sen. Jack Reed, Democrat from Rhode Island, to satisfy Shelby, who objected to any taxpayer subsidy for the rescue plan, lobbyists said.
After temporarily adjourning a late afternoon banking committee meeting on the legislation and pledging to reconvene later in the evening, Dodd said, "We're in pretty good shape. Let's see what happens over the next few hours."
The White House has threatened to veto a similar rescue package passed last week by the House of Representatives. But the Bush administration has left open the door to discussions.
White House spokesman Scott Stanzel on Thursday said, "We're not commenting on any discussions we may or may not be having. If a bill comes to the president's desk it should meet the principles he has outlined."
Administration officials have said President George W. Bush's priorities are to retool the FHA with a system that sees riskier borrowers pay a higher mortgage insurance premium and reforming Fannie Mae and Freddie Mac oversight.
Both the Senate and House packages contain approaches to meeting those White House's goals. But both packages also propose setting up the FHA mortgage insurance fund, an idea that the administration dislikes.
The Congressional Budget Office has said that the FHA mortgage insurance plan would cost up to $2.7 billion. That would pay for expanding the FHA so it can help arrange lower-cost refinancing for as many as 500,000 homeowners whose homes have lost value since they took out their mortgages.
Shelby, of Alabama, has insisted that taxpayer money not be used to finance the FHA insurance program. He was not present at the Thursday afternoon committee meeting.
"We believe that we have an agreement in concept," said Shelby spokesman, Jonathan Graffeo. "We are now in the process of seeing whether that concept can be translated into legislative language that we can agree on."
Since last spring, the nation's mortgage market has been shaken by sinking home values that have erased billions of dollars of investor wealth. An estimated two million foreclosures are forecast for this year.
In March, the Federal Reserve put billions of dollars on the line to facilitate the takeover of Wall Street investment firm Bear Stearns Cos Inc <BSC.N>, which was near collapse.
Democrats have criticized policy-makers for being too eager to bail out investors, yet reluctant to aid struggling homeowners.
Last week, the House approved its own version of legislation to set up the $300 billion fund, adding billions more in homeowner aid to stabilize the market.
House Financial Services Committee Chairman Barney Frank, who sponsored the House bill, said on Thursday he saw some chance a deal could be reached.
"I wouldn't say I was optimistic, but I think it has a reasonable chance," the Massachusetts Democrat said. (Reporting by Patrick Rucker and Kevin Drawbaugh) ((patrick.rucker@thomsonreuters.com; +1-202-310-5474; Reuters Messaging: patrick.rucker.reuters.com@reuters.net)) Keywords: USA HOUSING/CONGRESS
. Keywords: USA HOUSING/CONGRESS
(Updates with official closing numbers, adds details)
*Index closes at record high
*Resource and financial sectors rally
TORONTO, May 15 (Reuters) - The Toronto Stock Exchange's main index popped up more than 1 percent on Thursday, propelled further into record high territory by strong resource and financial shares.
Inmet Mining <IMN.TO> was the biggest net gainer on the day, rising C$6.25, or 9.3 percent, to C$73.75. Fertilizer company Potash Corp of Saskatchewan <POT.TO> was also among the leaders, finishing up C$5.28, or 2.7 percent, at C$204.50.
Gold producers also jumped, benefiting from rising gold prices. Agnico-Eagle Mines <AEM.TO> was up C$3.38, or 5.3 percent, at C$67.29, while the subindex gained 3.6 percent.
The S&P/TSX composite index <.GSPTSE> closed up 201.75 points, or 1.38 percent, at 14,828.06 with all but one of its 10 main sectors moving higher.
The surge helped the benchmark climb further into record territory, continuing the week's trend after it broke last summer's record high on Monday.
The financials sector, the biggest group on the index by weight, rose 1.6 percent, with Toronto-Dominion Bank <TD.TO> rising 94 Canadian cents, or 1.4 percent, to C$68.51, and Canadian Imperial Bank of Commerce <CM.TO> up 83 Canadian cents, or 1.1 percent, at C$74.84.
On the downside, FirstService Corp <FSV.TO> tumbled C$2.77, or 12.2 percent, to C$19.96 after the property services firm swung to a fourth-quarter loss as it was stung by unfavorable market conditions.
The telecoms sector was the only group in negative territory, giving up 0.2 percent. ($1=$1.00 Canadian) (Reporting by Leah Schnurr; Editing by Peter Galloway) ((leah.schnurr@thomsonreuters.com; +1 416 941 8056; Reuters Messaging: leah.schnurr.reuters.net@reuters.com))
Keywords: MARKETS CANADA STOCKS
.
Keywords: MARKETS CANADA STOCKS
NEW YORK, May 15 (Reuters) - Average daily borrowing by high-quality U.S. banks from the Federal Reserve rose to a record this week, surpassing the average borrowing in the week of the Sept. 11 attacks, the Fed said on Thursday.
Commercial banks' primary credit borrowings were an average $14.42 billion per day in the week ended May 14, higher than the daily rate of $11.72 billion in the Sept. 11, 2001 week, it said. (Reporting by Richard Leong) ((richard.leong@thomsonreuters.com ; +1 646 223 6313; Reuters Messaging: richard.leong.reuters.com@reuters.net )) Keywords: USA FED/DISCOUNT RECORD
NEW YORK, May 15 (Reuters) - The U.S. corporate credit
markets rallied on Thursday, while companies including HBOS Plc
<HBOS.L> and NiSource Finance Corp tapped the new issue
market.
The benchmark investment grade credit derivative index
tightened around 5.5 basis points to 90 basis points, its
tightest level in more than a week.
The rally was in line with a higher stock market, which was
buoyed by a pullback in crude oil. Healthy demand for new bond
issues also supported the market.
"There are a lot of new deals out there," said Mirko
Mikelic, senior portfolio manager at Fifth Third Asset
Management in Grand Rapids, Michigan.
New debt sales have been pricing more favorably than in
previous months, indicating better demand for new debt, he
said. "A lot of people are putting cash to work, the cash
market has moderately improved,"
HBOS, Britain's biggest mortgage lender, on Thursday sold
$2.0 billion in debt in the 144a private placement market, said
market sources.
NiSource Finance, a unit of electric utility NiSource Inc
<NI.N>, also sold $700 million in debt.
In the high yield market, Oklahoma City-based oil and
natural gas company SandRidge Energy Inc <SD.N> sold $750
million of 10-year senior notes in the 144a private placement
market. The size of the deal was increased from the originally
planned $500 million.
Financials dominated secondary trading with JPMorgan Chase
& Co's <JPM.N> 7.9 percent bond due 2018 the most actively
traded, according to MarketAxess.
Residential Capital's 8.375 percent bond due 2010 slipped
in jumpy trade. ResCap is offering to exchange the debt for new
bonds with a later maturity. The deadline for the offer will
expire on Friday.
The bond fell to 49 cents on the dollar, from 49.5 cents at
Wednesday's close, according to MarketAxess.
(Reporting by Karen Brettell and Anastasija Johnson; Editing
by Leslie Adler)
((karen.brettell@thomsonreuters.com; +1 646 223 6274; Reuters
Messaging: karen.brettell.reuters.com@reuters.net ))
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Keywords: MARKETS USCORPBONDS
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