TORONTO - The Toronto stock market ended a horrible 2008 trading year down a stunning 35 per cent -- but ended the last session of the year with a strong, triple-digit advance led across all sectors, led by gains in financials and energy, the two biggest sectoral decliners of the year.

New York markets rose following jobless claims data that was better than expected.

Toronto's S&P/TSX composite index closed up 156.98 points in thin volume to 8,987.7, its third consecutive triple-digit drive that added to a gain of points or per cent.

Those broad advances helped reduce losses from a miserable year that saw the TSX above 15,000 at midyear before the financial crisis sent the main index down as low as 7,724 near the end of last month. It comes close to the worst calendar year on the Toronto market in records dating to 1920 -- vying with 1931 when the market plunged 37.15 per cent.

"I would have to say that 2008 was a year of extremes on many fronts that quite frankly we have never seen before," said Gareth Watson, associate director and Canadian equity adviser at Scotia McLeod.

"In terms of optimism for 2009, I have to admit it's very difficult to find a positive lining at least for the first six months of the year, maybe going into the first nine months of the year."

The TSX Venture Exchange was ahead 23.96 points to 797.02 after starting the year at 2,839.66.

The Canadian dollar closed up a fifth of a US cent to 82.1 cents, capping a year when the loonie retreated 18.7 per cent for the year as the slowing economy and collapsing commodity prices dragged it down from just above parity with the U.S. dollar at the start of 2008.

The Dow Jones industrial average, which has sustained a year-to-date loss of 34 per cent, was up 108 points to 8,776.39.

The Nasdaq composite index added 26.33 points to 1,577.03, losing 40 per cent on the year while the S&P 500 index edged up 12.61 to 903.25 to lose 38 per cent during 2008.

The U.S. Labour Department said applications for unemployment benefits fell by 94,000 to 492,000 last week. The drop, partly reflecting Christmas-season factors, was larger than analysts had been expecting. However, the number of Americans receiving jobless benefits is at the highest level since 1982.

The TSX financial sector, down about 38 per cent as banks wrote off billions of dollars related to the U.S. housing sector, was ahead two per cent on the year's final day. TD Bank (TSX:TD), down 40 per cent this year, rose 95 cents to $43.45 as the bank dealt with a computer glitch that caused outages of its customer banking and investor services across the country. The problem was fixed by later afternoon.

CIBC (TSX:CM), which had the dubious distinction of racking up the greatest amount of writedowns during 2008, climbed $1.34 to $51.09. The stock is down 35 per cent from where it started the year -- but the stock hit a low of $39.52 Nov. 21.

The Toronto energy sector was up 1.7 per cent.

The February crude contract in New York surged $5.57 or 14 per cent to US$44.60 a barrel, a far cry from July's record high of US$147 a barrel, taking the TSX energy sector down 38 per cent for the year. Prices had earlier slipped as worries about global demand trumped rising tensions in the Middle East resulting from continuing Israeli air strikes in Gaza.

Prices rose in thin trading after the government reported that U.S. refineries ran at 82.5 per cent of total capacity on average for the week ended Friday, a drop of 2.2 per cent from the prior week and below analysts' expectations that it would remain flat.

Shares in sector heavyweight EnCana Corp. were up 55 cents to $56.96, down from a 52-week high of $97.81.

Oilexco Inc. (TSX:OIL) plunged 68 per cent to 28.5 cents after it said its British North Sea subsidiary is insolvent.

The other major loser is the base metals sector, down a staggering 68 per cent. Sector leader Teck Cominco Ltd. (TSX:TCK.B) closed up two cents to $6.02 after starting the year at $52.90.

The February bullion contract moved up $14.30 to US$884.30, about US$46 higher than where bullion started the year. The gold sector itself is flat for the year. It was up per cent Wednesday with Goldcorp Inc. (TSX:G) ahead $1.10 to $38.39.

The telecom sector was ahead 1.75 per cent Wednesday with BCE Inc. (TSX:BCE) up 99 cents to $25.13, down 38 per cent from its 52-week high attained when it looked like the $52 billion purchase of the telecom by a group led by the Ontario Teachers Pension Plan was still a go.

Shares in Research in Motion Ltd. (TSX:RIM) were up $2.10 to $49.50 after it extended its offer to buy Toronto-based Certicom Corp. (TSX:CIC) by 12 days. The BlackBerry maker's stock has plunged 67 per cent since its most recent 52-week high, which in turn helped take the information technology sector down about 50 per cent for the year.

Damage on the TSX was widespread covering all sectors except gold. There was surprise that victims included sectors that are normally considered good defensive plays.

But the consumer staples sector fell 8.3 per cent while the utilities sector gave back 24 per cent.

"It's not that there is anything wrong with Fortis (TSX:FTS) or TransCanada (TSX:TA) or Enbridge (TSX:ENB) or Shoppers Drug Mart (TSX:SC)," added Watson.

"It was just that nobody wanted to own stocks. Period."

In other corporate news, shares in Labopharm Inc. (TSX:DDS) soared 63 cents or 38.65 per cent to $2.26 after the U.S. Food and Drug Administration approved Ryzolt, the Montreal-area company's once-daily formulation of painkiller tramadol.