Financial Update

Economy resilient, Flaherty declares

The Canadian Press Finance Minister Jim Flaherty says the Canadian economy is facing a variety of economic challenges, but has so far remained resilient. "Certainly there has been a psychological effect of the recession in the U.S. housing sector, but keep in mind Canadian projections are on the positive side of the ledger,'' he told the Economic Club of Toronto yesterday. Flaherty acknowledged that Canadians face rising costs, including food prices and higher airline fees tied to fuel. But, Canada hasn't seen the same type of inflationary impact that other countries have experienced

· TSX jumped +144.88 to a new record high
· Dow +130.43
· Dollar continued upwards +.12c to $ $99.56
· Oil -$1.73 to $124.23US per barrel
· Gold -$.80US to $883.70US

Bond Rates: <http://www.bankofcanada.ca/en/rates/bonds.html> http://www.bankofcanada.ca/en/rates/bonds.html

TSX soars to new record thanks to RIM, EnCana

David Friend The Canadian Press

Two of Canada's most valuable companies have helped lift the Toronto stock market above its previous record high, set 10 months ago just before the credit crunch took the life out of many investments.

But some economists suggest the gains could wash away in the foreseeable future.
Both Research In Motion, the maker of the famed BlackBerry portable device, and oil and gas giant EnCana Corp. drove the market skyward yesterday. The two stocks were heavily traded, with RIM shares up eight per cent and EnCana ahead six per cent. Both stock jumps were motivated by corporate announcements, with EnCana saying it will divide itself into two companies, one focused on the oilsands and another concentrating on natural gas.

RIM investors gave its stock a boost after the company unveiled the new BlackBerry Bold smartphone, which has a wider array of functions aimed at the business market.
The two companies' combined weight pushed the TSX at the end of the day to 14,666.07, above a high of 14,625.76 set last July.

It was the third attempt the Toronto stock market has made at returning to the heights it left when the U.S. subprime mortgage mess surfaced. Last Thursday, the TSX just missed the benchmark despite a record-high closing price for crude oil.

The increase will likely evaporate somewhat if the two companies can't sustain their charge as the week progresses, said Fred Ketchen, a manager of equity trading at Scotia Capital. "We're going to give back some of these gains somewhere along the way,'' Ketchen said. "But if I keep looking out, I don't see the demand for energy backing off any time soon.''

Much of the momentum has been caused by strength in resource stocks, which represent about one-third of the market capitalization of the TSX. The energy sector has climbed 40 per cent since January while the price for crude oil rose above $125 US.