Canadian stocks finished higher on Thursday, aided by renewed strength in gold stocks and narrower losses in the financial sector. The benchmark S&P/TSX lost 0.4% to 8,705.91. Decliners outstripped advancers, by 833 to 652. The financial group as tracked by the Toronto Stock Exchange fell 0.8%, bouncing off lows of more than 2% during the session, as banking stocks on Wall Street fell sharply. Proposed U.S. government legislation about how to stabilize the financial systems doesn't adjust the mark-to-market rule, which outlines how banks value their assets. Without that, there's "even more pressure on the Treasury to nail down some kind of a valuation model," said Marc Pado, U.S. market strategist at Cantor Fitzgerald. Read more in Market Snapshot. U.S. stocks bounced late in the session Thursday, and the financial sector pared steep gains after a report the U.S. government is mulling direct assistance to people behind on mortgage payments. Royal Bank of Canada shook off losses and ended 1.3% higher. Bank of Montreal also reversed declines and closed up 1.1%. Toronto-Dominion Bank pared declines but still ended 2.9% lower. Shares of Manulife Financial slumped 6% after Moody's Investors Service placed the Aa1 insurance financial strength ratings of Manulife's subsidiaries and affiliated debt ratings on review for possible downgrade. The move, said Moody's, reflects its concern that the "life insurer's financial flexibility and economic capitalization has been weakened by the substantial decline in equity markets in the latter half of 2008." Manulife posted a fourth-quarter loss of C$1.9 billion, largely because of an increase in reserves for equity market related policy guarantees, said the agency. Separately, Moody's downgraded Sun Life Financial's credit ratings and the insurance financial strength ratings of its operating companies to Aa3 from Aa2 because of "continuing deterioration in the company's U.S. business, which has strained the overall enterprise's earnings and financial flexibility." Sun Life's shares managed to claw back from the red, and ended up 0.7%. The gold group rose 1.6%, beating back earlier losses. Gold futures ended the volatile session 0.5% higher at $948.50 an ounce on the Cemex division of the New York Mercantile Exchange, their highest level in seven months. Goldcorp picked up 1.5% and Kinross Gold rose 0.5%. But Iamgold remained down, by 2.6%. Energy stocks lost 0.2% as crude-oil futures slid 5.5% to $33.98 a barrel on the New York Mercantile Exchange. Crude futures have declined for five straight sessions. Nexen dropped 2.7%, Talisman Energy fell 0.7% but EnCana rose 0.6%.

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