Toronto's main stocks rebound

Toronto's main stock index rebounded to end higher on Friday after a speech by Federal Reserve Chairman Ben Bernanke left the door open for further US stimulus measures next month. Bernanke stopped short of signalling more moves to boost growth during a speech at a central bank conference in Jackson Hole, Wyoming, but he said the Fed's policy panel would meet for two days in September instead of the scheduled one day to discuss any additional stimulus.
"He's not a magician. He's just helicopter Ben. He's promising to land in his helicopter with emergency rations, but we haven't seen any yet," Michael Smedley, chief portfolio manager at Morgan Meighen & Associates. Most of the TSX's 10 main sectors ended higher, though financials - the most heavily weighted group - dragged the TSX to underperform its US counterparts after disappointing results from Royal Bank of Canada, the country's biggest lender.
RBC shares tumbled 3.5 percent to C$48.98 after the company reported a profit that missed estimates and said weak market conditions would likely continue to weigh on it. Other big banks skidded ahead of earnings releases next week. Bank of Nova Scotia shed 1.6 percent to C$51.34, and Toronto-Dominion Bank dropped 1.1 percent to C$73.90.
The Toronto Stock Exchange's S&P/TSX composite index ended up 43.20 points, or 0.35 percent, at 12,327.51. Eight of its 10 main sectors ended higher, including weighty materials and energy shares. The TSX gained 2.7 percent for the week. Fergal Smith, managing market strategist at Action Economics, said near-term support holding around the August 5 and August 8 lows of 11,600-11,900 would set up a double-bottom, which could prompt a rally targeting the June low of 12,764.
After an initial selloff following the speech, the TSX index followed US markets higher as some investors saw the Fed's lack of action as good news for the economy. While expressing long-term optimism, Bernanke said the Fed found recent developments troubling and saw inflation staying low.
"The markets said, hey, maybe the fact that the Fed is staying out of the way and not meddling with markets may not be such a bad thing," said Levente Mady, market strategist at Union Securities in Vancouver. The top gainer was fertiliser producer Potash Corp, which jumped 3.9 percent to C$56.15. Precious metal miners also climbed on the back of rallying gold prices after days of liquidation had pushed bullion down from record highs. Goldcorp gained 1.8 percent to C$50.98, and Barrick Gold pushed up 1.4 percent to C$50.06.