Canadian stocks have rallied again on Friday to extend a three-month high. Financials have led the way following encouraging earnings news from Citigroup (C).

The S&P/TSX Composite Index has gained 104.96 points or 1.12% to move at 9,448.33. The index is heading toward its best close since January 6.

The Financial Index is up 1.2%. Among Canadian big six banks, CIBC (CM.TO) has surged 4.3%, Scotiabank (BNS.TO) is up 4% and National Bank (NA.TO) has added 2.7%.

Royal Bank of Canada (RY.TO) has gained 1.9%. The company said that it expects to record a goodwill impairment charge of about US$850 million for the second quarter, reflecting the impact of prolonged challenging economic conditions that have affected its International Banking reporting unit.

Energy stocks are showing a 1.8% rise as crude oil is up 25 cents to $50.23, although oil has given back the bulk of an early rally. Canadian Natural Resources (CNQ.TO) has rallied 2.7%, Baytex Enerfy Trust (BTE.UN.TO) is up 2.2%, Suncor (SU.TO) has climbed 2.1% and Encana (ECA.TO) has added 1.8%.

In corporate news, UTS Energy (UTS.TO) is up 1.1% after the company said its board rejected a sweetened takeover offer from Total S.A. of C$1.75 per share, indicating that the offer was inadequate.

On the downside, gold stocks are down 2.3% and materials stocks have lost 1.5% as the precious metal continued its downward move on the Comex. Eldorado (ELD.TO) has dropped 3.3%, Royal Gold (RGL.TO) is down 3.1% and Goldcorp (G.TO) has dropped 2.8%.

In other corporate news, FNX Mining (FNX.TO) has lost 3.6% after the company said that it is considering several possible production alternatives for its Sudbury mining operations as Vale Inco decided to extend its planned three week scheduled maintenance shut down in May by an addition eight weeks to July 27.

Tundra Semiconductor Corp. (TUN.TO) has soared 13.1% after Gennum (GND.TO) increased the aggregate purchase price for the company from approximately C$86 million to about C$112 million. Gennum stock has dropped 9.4% on the news.

Patheon (PTI.TO) has gained about 1% after the company said the Ontario Securities Commission has asked it to revise its unsolicited offer and also to take other steps to ensure equal treatment of shareholders before it can proceed with the offer to acquire restricted voting shares of Patheon.

On the economic front, Statistics Canada reported consumer prices rose 1.2% in March, down from the 1.4% increase in February. The upward pressure on the Consumer Price Index (CPI) came primarily from two sources: higher food and shelter costs.

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