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A pumpjack brings oil to the surface in the Monterey Shale, California, April 29, 2013. The vast Monterey shale formation is estimated by the U.S. Energy Information Administration to hold 15 billion barrels of technically recoverable oil, or four times that of the Bakken formation centered on North Dakota. Most of that oil is not economically retrievable except by hydraulic fracturing, or fracking, a production-boosting technique in which large amounts of water, sand and chemicals are injected into shale formations to force hydrocarbon fuels to the surface.Lucy Nicholson/Reuters

North American markets advanced, following the Dow Jones industrial average's biggest two-day slide in nearly a year, as earnings boosted consumer and materials shares.

Buying accelerated in afternoon trading as energy producers in the S&P's 500 index reversed a 2 per cent slide after U.S. crude erased a decline. Boeing Co. and McDonald's Corp. extended rallies to more than 5.1 per cent to pace gains among large stocks. Dow Chemical Co. climbed 4.6 per cent, the most in a year, as earnings topped estimates. Harman International Industries Inc. surged 24 per cent to the higher since 2005 after raising its forecast.

In Toronto, the S&P/TSX composite index came back from a 210-point plunge to finish 33.08 points higher at 14,635.96 after a decline in energy and mining shares was offset by gains in financials and most other major sectors.

The Canadian dollar lost more ground in the wake of Wednesday's announcement from the U.S. Federal Reserve, which left markets with the impression that the central bank will start hiking rates around the middle of this year. The currency touched a low point of 78.92 cents U.S. and a high of 79.92 cents Thursday, having plunged below the 80-cent mark Wednesday as crude prices tumbled again. The loonie lost 0.57 of a cent to 79.3 cents US, close to its lowest level since early April 2009, adding to the three-quarters of a cent drop on Wednesday.

The Dow Jones industrial average added 225.5 points to 17,416.85, the S&P 500 edged up 19.09 points to 2,021.25 and the Nasdaq composite gained 45.41 points to 4,683.41.

"It's almost a relief rally you're seeing here today," Bill Schultz, who oversees $1.2-billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania, said in a phone interview. "You had some decent earnings reports come out today indicating that the fears of drastic slowdown may not be as imminent as people had feared over the last two days."

Equities trading has become more volatile amid signs that the plunging price of crude and a stronger dollar are eroding corporate profits. The Chicago Board Options Exchange Volatility Index slid 6.9 per cent to 19.04 today. The VIX had jumped 32 per cent in the previous two days, its biggest gain in almost seven weeks.

Investors scrutinized earnings from more than 50 S&P 500 companies for clues on the strength of the U.S. economy a day after U.S. Federal Reserve policy makers boosted their assessment of the economy as the job market improved and fuel costs dropped.

Fed Chair Janet Yellen told Democratic lawmakers on Thursday that there were no plans to raise interest rates immediately, according to Senator Chuck Schumer.

Data on Thursday showed contracts to purchase previously owned U.S. homes unexpectedly fell in December by the most in a year, a sign the industry's recovery remains uneven. A separate report showed the fewest Americans in almost 15 years filed applications for unemployment benefits during a holiday– shortened week.

Companies from Procter & Gamble Co. to DuPont Co. and Pfizer Inc. had cited the greenback's strength as a major headwind for profits. The strongest dollar in a decade is making American goods and services more expensive overseas, eroding sales.

Google Inc., Visa Inc. and Amazon.com Inc. are among 52 S&P 500 companies scheduled to post results on Thursday. Of those that have reported profit so far, 76 per cent have exceeded estimates, while 57 per cent topped sales projections, according to data compiled by Bloomberg.

Oil prices inched up slightly after plunging almost $2 Wednesday in the wake of figures showing U.S. crude inventories still at 80-year highs. The March contract came off a low of $43.58 to add eight cents to US$44.53 a barrel and the energy sector dropped 1.1 per cent.

A major decliner was Canadian Oil Sands. The company cut its quarterly dividend from 35 cents to five cents a share to preserve cash as it tried to cope with the 55 per cent plunge in oil prices since last summer.

The company announced in early January that it would be cutting the dividend from 35 cents to 20 cents, but said after markets closed Thursday that the outlook has deteriorated since then and slashed the planned payout further. Its stock had been halted mid-afternoon, when it was down 50 cents or 7.1 per cent at $6.51.

The base metals sector on the TSX fell 1.65 per cent as March copper fell three cents to US$2.44 a pound.

Gold plunged as traders weighed the chances of the Fed moving rates up as early as June and February bullion declined $31.30 to US$1,255.90 an ounce and the gold sector faded 0.6 per cent.

TSX sectors outside the resource groups were positive, led by a 2.1 per cent rise in the tech sector and a 1.9 per cent run-up in consumer staples.

Meanwhile, PotashCorp (TSX:POT) posted quarterly income of $407 million or 49 cents per share, beating estimates of 47 cents. Revenue was $1.9 billion, compared with $1.5 billion a year ago and its shares added 12 cents to $45.48.

Rogers Communications Inc. (TSX:RCI.B) posted adjusted net income of $355 million or 69 cents a share, beating expectations of 64 cents. Its revenue was up four per cent at $3.37 billion. It also hiked its annual dividend by five per cent and its shares rose 31 cents to $44.86. Its shares gained $1.76 to $78.

With files from Reuters and The Canadian Press

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