(RTTNews) - Canadian stocks skyrocketed higher by a record 1600 points at the opening bell Tuesday and were able to hang onto most of their gains from that historic rally, even as Wall Street shares slipped into negative territory.

Bay Street was closed on Monday as stocks around the globe rebounded from recent losses in dramatic fashion amid optimism that policy makers were taking productive steps to restore stability to the financial system.

Bargain hunters swooped in to indiscriminately snap up beaten down stocks, driving the S&P/TSX Composite higher by 890.50 points to 9955.66. With the advance, the main index pared some of last week’s massive losses and moved away from Friday’s 3-year closing low.

Still, if Wall Street’s performance on Tuesday is any indication, Toronto stocks may have trouble extending its gains on Wednesday. US stocks came under pressure in afternoon dealing amid anxiety that the world may still face a deep, prolonged recession.

US officials detailed a plan to invest $250 billion in a number of struggling banks as part of the $750 billion bailout package passed last week.

The move follows a series of dramatic measures taken on both sides of the Atlantic. On Monday, major European nations came together to partially nationalize floundering banks. Also, last week, central banks around the world offered coordinated rate cuts, hoping to encourage lending between gun shy banks.

Canadian financial stocks soared on Tuesday, picking up 12.6 percent, bolstered by reports indicating that the Bank of Canada is preparing its own $225 billion plan to prop up domestic banks. While none of Canada’s big six banks have a fatal degree of exposure to the subprime market, lenders are finding it nearly impossible to secure financing in the midst of the biggest banking crisis since the Great Depression.

Among the big six banks, Royal Bank (RY.TO) jumped 14 percent. Insurance companies also performed particularly well. Sun Life Financial picked up 20 percent, while Manulife (MFC.TO) added 14 percent.

Energy stocks rose 14.5 percent, even as oil for December delivery moved to $78.63, down $2.56 on the session. Prices hit as high as $85.28 in early dealing, but fell along with US stocks.

Higher base metal prices helped mining stocks rise 10 percent. Equinox Minerals (EQN.TO) climbed 36 percent, clawing back some its steep recent losses.

Teck (TCK.B.TO) announced Monday that it has agreed to sell approximately 27.6 million units of Fording Canadian Coal Trust (FDG.UN.TO) to an unnamed chartered bank. Teck intends to use the proceeds of the sale to fund a portion of the cash payment in respect of Teck’s purchase of all of the assets of Fording, which is expected to close on October 30. The purchase price to be paid per Fording unit will be $83.30.

Strength was widespread across a variety of sectors on Tuesday. Consumer staples stocks, which best withstood the intense selling pressure of the past few weeks, enjoyed more modest gains.

Canadian new motor vehicle sales fell for a third straight month in August, slipping 2.3 percent due to declining sales of passenger cars, according to data released by Statistics Canada Tuesday morning in New York.

Dealerships sold 137,937 new motor vehicles in August, down from 141,196 in July. 143,840 new motor vehicles was sold in August 2007.

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Posted in Categories: Canada, Eurozone, Releases, Stocks, USA.

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