The Toronto stock market closed higher for a second day Tuesday as investors breathed a sigh of relief that a solution to the European debt crisis may finally be at hand, easing concerns that demand for Canadian commodities will take a hit.
However, the S&P/TSX composite index closed well off earlier highs but still up 113.91 points, or nearly 1%, to 11,821.09 on top of a 244-point runup Monday
The Canadian dollar was up 0.53 of a cent to 98.03 cents U.S.
The showing took some of the sting out of last week's 925-point plunge, which took left the TSX about 20% below its highs for the year.
The TSX gained as much as 351 points during the morning before losing momentum late in the session as some analysts cautioned investors that they shouldn't read too much into the strong gains of the past two days.
The energy sector climbed as Suncor Energy gained 72 cents to $28.38 while Canadian Natural Resources rose 22 cents to $31.77.
The base metals sector continued to come back from a 23% plunge last week. It was up Tuesday while the December copper contract on the Nymex closed up 16 cents to $3.44 U.S.
Teck Resources jumped 85 cents to $32.06 while First Quantum Minerals advanced $1.45 to $16.40.
Global miner Rio Tinto PLC has bought another 3.7 million shares of Ivanhoe Mines Ltd. raising its stake in the Vancouver-based gold and copper miner to 49%, the maximum level allowed under a deal between the two companies.
On Monday, Ivanhoe shares closed at their lowest level in more than a year as the company fought back against an attempt by the Mongolian government to take a bigger stake in its massive Oyu Tolgoi copper-and-gold project. But on Tuesday, its shares jumped $2.42 or 16% to $17.42.
Optimism over the European debt situation also powered financials higher, as Scotiabank was ahead 67 cents to $52.97 and National Bank gained $1.82 to $70.02.
The capital markets division of Royal Bank has agreed to pay $30.4 million U.S. to settle charges by the U.S. Securities and Exchange Commission over allegations it sold unsuitable investments to five Wisconsin school districts. Its shares rose 10 cents to $48.08.
Research In Motion Ltd. was also supportive, up 81 cents to $23.15 amid speculation that activist investor Carl Icahn had taken a stake in the BlackBerry maker.
The gold sector lost early gains and turned negative by the close as Barrick Gold Corp. was off 38 cents to $48.56.
In other corporate news, Silver Standard Resources Inc. said Tuesday it’s revising its estimates after the Pirquitas mill in Argentina was shut down due to a gearbox failure.
The Vancouver-based miner said silver guidance is being reduced to 7.3 million ounces to 7.6 million ounces for 2011. In June, Silver Standard estimated silver production of 8.5 million ounces for the year. Its shares were down 51 cents to $21.43.
The board of Clearwater Seafoods Income Fund board has formally rejected a takeover bid from rival Cooke Aquaculture takeover bid as too low. The Halifax company said Tuesday it believes the $3.50 per unit offer -- valuing Clearwater at about $97.1 million -- "does not adequately reflect the value of the fund and its future prospects." Clearwater units dipped one cent to $2.46.
ON BAYSTREET
The TSX Venture Exchange surged 43.28 to 1,570.43, while the Nasdaq Canada index gained 13.21 points to 448.34
All but one of the 14 Toronto subgroups remained positive at the close. Metals and mining leaped 5.3%, information technology stocks picked up 3.7%, and utilities improved 2.9%.
Only gold lost ground, 1.4% at that.
ON WALLSTREET
In New York, stocks rose Tuesday, ending higher for a third day, as investors grew more optimistic about Europe's debt crisis being resolved.
But the advance lost momentum in the final hour of trading after a report in the Financial Times raised questions about a proposed second bailout for Greece.
The Dow Jones Industrials grew 146.83 points, or 1.3%, to end Tuesday’s session at 11,190.70
The S&P 500 also moved up 12.43 points to 1,175.38, while the Nasdaq strengthened 30.14 points to 2,546.83
Stocks opened higher and rallied for most of the day, with the Dow rising 300 points in the afternoon, amid hopes that European leaders will take bolder steps to resolve the long-standing sovereign debt problems.
Those hopes were tempered after the FT said euro area policymakers are at odds over a plan to provide Greece with a second €109-billion bailout.
The newspaper said some members of the 17-nation currency bloc are arguing for creditors to accept larger losses on Greek bonds, calling into question a key aspect of the rescue plan announced July 21.
According to the report, officials in Germany and the Netherlands are leading the charge for banks to take larger "hair cuts" on loans to Athens. But the idea is strongly opposed by France and the European Central Bank, which holds billions of Greek bonds on its books.
Shares of major U.S. banks were the main laggards in the final hour of trading. Bank of America and JPMorgan fell, while Wells Fargo and Goldman Sachs pared earlier gains.
Earlier, investors had cheered news that the Greek Parliament approved a new property tax that could help set the stage for the debt-stricken nation to receive more bailout money.
European leaders are under intense pressure to help Greece avoid a default, something investors fear could shock the global financial system.
Greek Prime Minister George Papandreou pledged that Greece will meet all of its financial obligations, saying the nation will "fight our way back to growth and prosperity."
Greece has been in talks with officials from the International Monetary Fund and other euro area nations over budget targets Athens needs to meet in order to obtain its next installment of emergency funding.
Without the next €8-billion tranche, Greece is expected to run out of the cash it needs to pay its bills next month.
On Tuesday, gold and silver prices also rebounded, bolstering shares of Ishares Silver Trust and Spdr Gold Trust, as well as gold and silver miners, including Silver Wheaton, BHP Billiton and Freeport-McMoran
Economically speaking, home prices across 20 major U.S. cities rose 0.9% in July from a month earlier, according to the S&P/Case-Shiller index. But prices were still 4.1% lower than 12 months earlier.
A key measure of consumer confidence remained unchanged in September.
The Conference Board said its consumer confidence index, which had dropped sharply in August, came in at 45.4 this month.
Economists had forecast an increase to 46.6 in September from 44.5 in August.
The price on the benchmark 10-year U.S. Treasury sharply decreased, pushing the yield up to 2.02% from 1.90% late Monday. Treasury prices and yields move in opposite directions.
Oil for October delivery gained $3.35 to $83.59 U.S. a barrel.
Gold prices jumped 3.6% to $1,652.50 U.S. an ounce, while silver rallied 5.2% to $31.54 U.S. an ounce.
