Stocks bolted higher on Tuesday, pushing the S&P 500 to an intriguing technical level: It hit a fresh two-year high, erasing all of the carnage that unfolded following the spectacular collapse of Lehman Brothers.
The S&P 500 closed at 1,254.60, up 7.52 points, or 0.6 per cent. That marks the first time the index has closed above 1,250 since Sept. 12, 2008, which was the last trading day before Lehman Brothers imploded, ushering in the worst days of the financial crisis and sending the index down 46 per cent over the next six months.
The Dow Jones industrial average closed at 11,533.16, up 55.03 points, or 0.5 per cent - also marking a fresh two-year high. In Canada, the S&P/TSX composite index closed at 13,365.15, up 171.87 points, or 1.3 per cent, bringing it within just 11 per cent of its record high.
The gains, part of a so-called Santa rally that some market participants had been expecting as the year ticks down, were largely driven by financials and commodity producers.
In the U.S., Bank of America Corp. rose 2.9 per cent and JPMorgan Chase & Co. rose 2.6 per cent - part of a growing fascination with financials now that Canadian banks have been seen swooping down on U.S. assets.
The latest: Toronto-Dominion Bank agreed to buy Chrysler Financial in a $6.3-billion (U.S.) deal. Investors like the deal, sending TD shares up 3.7 per cent. Bank of Montreal, which suffered recently after agreeing to buy Marshall & Ilsley Corp. for $4.1-billion, rose 2.1 per cent.
Energy and materials stocks were also strong, after crude oil rose to $89.82 a barrel, up 45 cents, and investors renewed their interest in base metals and fertilizer producers. Suncor Energy Inc. rose 2.4 per cent, Teck Resources Ltd. rose 2 per cent and Potash Corp. of Saskatchewan Inc. rose 2.7 per cent.