Bay Street stocks finished higher Thursday even as the price of oil rose in afternoon trading and Nortel Networks issued a profit warning. At the close, the S&P/TSX composite index was up 26.35 points at 8,493.38 on a volume of 240 million shares.

In Toronto, strength in the broader market overcame weakness among technology issues.

The heavily weighted financial services index climbed 1%, while the mining group rose 1.2%.

Among financial stocks, Manulife shares rose $1.01 to $56.82, and Bank of Nova Scotia added 41¢ to $36.67.

TD Bank gained 53¢ to $46.25, while Sun Life added 60¢ to $47.30.

Technology shares slipped 1.5% as investors vented their frustration with Nortel Networks. The company warned its third-quarter revenue will be below the US$2.6 billion preliminary unaudited revenues it reported for the second quarter while full-year growth is expected to trail the industry.

Nortel shares fell 43¢, or 8.7%, to $4.49 in heavy trading of 42 million shares.

Shares in Celestica continued to fall, slipping 49i¢, or 3%, to $15.83, after falling 13% yesterday. The firm issued a profit warning on Tuesday.

The TSX energy group slipped 0.12% despite the rise in the price of crude.

Crude-oil prices turned higher as traders continued to assess Hurricane Ivan’s potential damage to oil and gas facilities in the Gulf of Mexico. Crude for October delivery ended up US30¢ at US$43.88 a barrel, but off a session high of US$44.20.

Petro-Canada shares were down 1.22¢ at $61.65 after Finance Minister Ralph Goodale refused to comment on rumours that the federal government is on the verge of a selling its stake in the firm.

Norbord Inc. shares fell $1.71, or 12%, to $12.74 after news that Brascan Corp., a major shareholder, is selling part of its stake in the wood panel maker for $127.5 million.

The junior S&P/TSX Venture composite index edged up 0.47 of a point to 1,526.25.

In New York, stocks moved higher buoyed by a drop in crude-oil prices and tame inflation data which eased fears the Federal Reserve could turn to a more aggressive policy on interest rate hikes.

The Dow Jones industrial average finished up 13.13 points at 10,244,49.

The tech-heavy Nasdaq composite index rose 7.56 points to 1,904.08, buoyed by a rebound in semiconductor stocks and Internet shares.

The S&P 500 climbed 3.13 points to 1,123.5o.

On the economic front, the Labor Department reported only a modest 0.1% rise in consumer prices for August. Excluding food and energy, inflation also rose 0.1%.

The inflation data was better than expected. Economists were expecting both inflation gauges to rise by 0.2%