By: Franco Pingue
Reuters
Monday, August 11, 2003

TORONTO, Aug 11 (Reuters) - Toronto stocks closed at their highest level in 14 months on Monday as expectations that the North American economy is ready to bounce back filtered through a thin market.

The Toronto Stock Exchange S&P/TSX composite index .GSPTSE , which has advanced in three consecutive sessions, rose 65.85 points, or 0.91 percent, to close at 7,317.81.

Volume was light as 185 million shares valued at C$2 billion changed hands. Momentum was positive as 667 issues advanced and 490 declined.

The blue-chip S&P/TSX index .TSE60 rose 4.31 points, or 1.06 percent, to 412.31.

"The feeling is that if the U.S. resumes its growth, then Canada is bound to follow because we are so largely dependent on the U.S. for growth," said Elvis Picardo, chief market strategist with Global Securities Corp.

"Once we have the weak part of the year out of the way in the next couple of months, we can definitely expect to see strong buying coming into the dips."

Investors are expected to pay close attention to the U.S. Federal Reserve's decision on interest rates on Tuesday.

The information technology sector rose 1.7 percent after some recent losses, while energy stocks added a gain of 1.3 percent following Iraqi supply concerns. Eight of the TSX's 10 subindexes finished higher.

Graphics chip maker ATI Technologies ATY.TO , which fell 12 percent last week, rose 80 Canadian cents, or 5 percent, to close at C$16.50. Contract electronics manufacturer Celestica Inc. CLS.TO moved up C$1.22, or 6.4 percent, at C$20.34.

Technology stocks were also given a boost after software maker Oracle Corp. ORCL.O was upgraded by brokerage firm Merrill Lynch.

Energy stocks advanced as one of Iraq's main refineries halted production because of a power failure.

Compton Petroleum CMT.TO rose 24 Canadian cents, or nearly 4 percent, to C$6.30, while PetroKazakhstan PKN.TO climbed C$1.40, or 7 percent, to C$21.50.

PetroKazakhstan garnered positive attention because of recent strong earnings, a share buyback program, reduced operating costs and a buoyant outlook.

Despite the market clawing to its highest level in more than a year, some experts still feel there is a dark cloud of concern over the marketplace.

"Now is a good time for people to review their asset mix, review the amount of risk that they incur and review the amount of diversification they need," said Adrian Mastracci, investment counsel and president of KCM Wealth Management Inc.

"There will be continued volatility and I don't think it's going to be a straight line up."

U.S. markets also finished higher but the gains were limited as most investors decided to wait for the Fed's decision on interest rates before placing large bets.

The Dow Jones industrial average .DJI rose 26.26 points, or 0.29 percent, to 9,217.35, while the tech-heavy Nasdaq composite index .IXIC added 17.48 points, or 1.06 percent, to close at 1,661.51.

($1=$1.38 Canadian)

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