News

Surging gold prices and a rebound in technology heavyweight Research in Motion propelled the Toronto Stock Exchange to strong afternoon gains, as the Canadian market posted its second-strongest session in the past six weeks.

The S&P/TSX composite index closed up 147.55 points, or 1.4 per cent, at 11,025.90, moving back above 11,000 after dipping below that key psychological level last week. The gains were fuelled by a 4.1-per-cent jump in the materials sector, as a surge in buillion to another new record sent gold-producer stocks sharply higher, and a 4.7-per-cent rise in the technology sector, as RIM bounced back smartly from Monday's selloff in the stock.

Stocks in New York were mixed, as concerns about the banking sector and U.S. employment prospects were offset by generally encouraging earnings reports. The Dow Jones industrial average slipped 17.53 points to 9,771.91, but the S&P 500 was up 2.53 points at 1,045.41 and the Nasdaq composite rose 8.12 points to 2,057.32.

Gold jumped $31.40 (U.S.) to $1,085.40 an ounce in New York, after the International Monetary Fund confirmed it had sold 200 tonnes of gold to India. The sale accounts for more than half of the IMF's planned 403-tonne gold sales program that was approved in September, and avoids investor fears that those supplies would flood the open market and drive down prices.

Among gold stocks, heavyweights Barrick Gold Corp. and Goldcorp Inc. surged 7 per cent.

RIM, which tumbled Monday after Citigroup downgraded the stock to "sell", bounced back 6 per cent Tuesday, recovering all but a few cents of Monday's losses.

Overall, nine of the S&P/TSX composite's 10 major sectors rose in the session. The only decliner was consumer discretionary sector, off 0.3 per cent.

Oil rose $1.27 (U.S.) to $79.40 a barrel in New York, after trading as low as $76.55 earlier in the day. TSX energy stocks rose 0.5 per cent.

After the closing bell, Dow component Kraft Foods reported better-than-expected third-quarter earnings, and raised its full-year profit forecast. Wednesday is another busy day for third-quarter earnings reports, including those of Cisco Systems, News Corp. and Time Warner. Canada also has a busy earnings schedule, with TransCanada, Agrium, Goldcorp and Westjet among the companies scheduled to report.

Markets will also be watching the U.S. Federal Reserve Board's monetary policy meeting, which began Tuesday and ends with a formal announcement on interest rates Wednesday afternoon. The Fed isn't expected to make any changes in rates, but the wording of its statement will be closely monitored for any hange in its tone on the economy or any hints of the timing of eventual rate increases.