By James Langton

(June 2 – 17:30 ET) – Markets opened with a huge rally this morning and coasted to a strong close. The much-anticipated U.S. labour report surprised analysts with numerous signs of economic weakening. On the strength of this data most economists now believe that previous rate hikes are starting to work. Consensus is shifting to the expectation that the U.S. Federal Reserve Board is finished raising rates for now.

Against this backdrop stocks took off. The TSE 300 composite index finished the day up 195 points to 9747. Volume returned today too, although it slowed to a trickle toward the close, finishing with 162.3 million shares crossing the tape. Volume came in 2:1 in favour of buyers, and advancers outnumbered decliners 14:9.

The rally was near unanimous with 10 of the TSE’s 14 sub-indices finishing up. Industrials led the way, up 4%. Consumer stocks, financials, utilities and golds were all strong on the day. With the push into technology, many investors dumped rocks, trees and energy stocks, leaving those groups to the value players.

The big winners on the day were all techs. Nortel Networks Corp. spearheaded the charge, finishing up almost 5% on 9.3 million shares. It was joined by JDS Uniphase, Certicom, Sierra Wireless, 724 Solutions and BCE Emergis. Many of those names packed on more than 20% today. Open Text soared 36%. The biotechs were back in vogue, too, with Angiotech and QLT Phototherapeutics boasting big gains.

Non-tech gainers included CIBC on behalf of the banks. TD was also an active and strong trader. On today’s economic news CIBC led the banks in cutting mortgage rates.

Golds were also strong on the heels of the U.S. economic data, as the price of the metal picked up. Producers such as Placer Dome and Kinross were boosted as a result.

Abitibi led the paper group down. Other losers include General Motors, Burlington Resources, Alberta Energy, Berkley Petroleum and Canadian Natural Resources.

In the U.S. traders rejoiced at the economic data and the prospect of a dovish Fed. The Dow finished up 142 points to 10794. The NASDAQ added 231 points to 3813. Internet stocks actually came back to life today. The big gainers included Nextlink Communications Inc. and Conexant Systems Inc. The S&P 500 finished up 28 points to 1477.

Merger talk helped push up some U.S. stocks. Northwest Airlines Corp. gained 25% after it was reported to be in talks with American Airlines. Bestfoods has received a sweetened offer from Unilever NV.

One of the wackiest stories of the day came out of the venerable BBC. It reported that the province of British Columbia is wooing Microsoft Corp. to move north to B.C., if only to avoid being broken up.

The CDNX also had a good day. It finished up 45 points to 3370 on strong volume of 45.6 million shares. Technology stocks led the way, up 3.8%. Mines were up, while energy stocks slid. Hilton Petroleum Ltd. led the fall, dropping 37% to $2.40 on 4.7 million shares.