Toronto’s main stock index jumped nearly 2% on New Year’s Eve to end 2008 on a positive note as oil prices staged a late-session rally.

The S&P/TSX composite index closed up 156.98 points, or 1.8%, at 8,987.70 in a third-straight session of triple-digit gains.

The benchmark index posting a full-year drop of 35%, the worst year for Canadian stocks since 1931,

All 10 main subgroups ended higher on Wendsday, led by health care, up 4%, information technology, up 3%, and consumer staples, up 2.5%.

The heavily weighted energy sector rose 1.7%, with Husky Energy, Nexen and Ensign Energy Services each gaining more than 3%.

Oil prices surged late in the session to end up US$5.57, or 14%, at $44.60 a barrel, lifted by concern about winter fuel supplies amid slowing refinery activity.

Despite the jump, crude is down more than US$100 a barrel from its high set in July as the global economic crises sharply lowered demand for commodities.

The year’s worst performing TSX sector was information technology, which lost half its value. It was followed by financial services, which dropped 39%, and energy, which fell 38%.

Consumer staples, such as grocery store chains, suffered the smallest drop at about 8%.

Among big movers on Wednesday, Research in Motion, maker of the BlackBerry, jumped 4% to $49.50.

The junior S&P/TSX Venture composite index gained 23.96 points, or 3.1%, to end the year at 797.02. The benchmark for Canada’s emerging stocks posted at loss of 71.93% for 2008.

The Canadian dollar gained 0.2¢ to end 2008 at US82.10¢, down 18.7% for the year. The slowing economy and collapsing commodity prices dragged the loonie down from just above parity with the U.S. dollar at the start of 2008.

In New York, Wall Street closed out its worst year since the Great Depression on an up note on Wednesday as fresh efforts to stem the recession from Washington lifted equities for the second consecutive session.

Late Tuesday, the U.S. Federal Reserve provided clarity on its plan to reduce mortgage costs and set a goal to buy US$500 billion in mortgage-backed securities by mid-2009.

The Dow Jones industrial average rose 108 points, or 1.25%, to 8,776.39. The S&P 500 gained 12.61 points, or 1.42%, to 903.25. The Nasdaq composite index climbed 26.33 points, or 1.70%, to 1,577.03.

For the month, the Dow slid 0.6%, the S&P added 0.6% and Nasdaq climbed 2.7%.

For the year, the Dow fell 33.8%, its bleakest year since 1931; the S&P skidded 38.5%; and the Nasdaq posted its worst year ever, with a 40.5% drop.

It was the third biggest percentage age loss ever for the Dow industrials and the broad S&P 500.

IE