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After three days of losses, shares found a stronger footing in Toronto, led by a recovery in gold shares boosted by higher bullion prices.

After three days of losses, shares found a stronger footing in Toronto, led by a recovery in gold shares boosted by higher bullion prices.

The S&P/TSX composite index, after some early session hesitancy, recovered in afternoon trading to move to the upside and close with a gain of 26 points or 0.2 per cent to 11,493.

In New York, stocks traded mixed. Blue chip stocks advanced, with the Dow Jones Industrial Average breaking a three day string of triple-digit declines to rise 59 points or 0.5 per cent.

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The technology-laden NASDAQ fell 0.3 per cent, following disappointment over results from electronic gadget maker Apple.

The market shrugged off an unexpected sign of weakness in the U.S. housing market, one of the few major pieces of North American economic data released during the session.

New U.S. home sales in June plunged 8.4 per cent to an annual rate of 350,000 units, the lowest since January, dashing hopes that the housing market is in a strong recovery.

Market watchers were guarded that the improvement in share prices Wednesday was the start of a major advance, saying the move could have been due to profit taking by short sellers after recent declines.

"This morning my trader was joking that this is a dead cat bounce," said Paul Moroz, deputy chief investment officer at Mawer Investment Management Ltd. in Calgary.

Mr. Moroz says investors have been cautious, focusing on more conservative dividend paying stocks because of signs of slowing economic growth.

"We've definitely seen a bit of a deceleration," he said. "The probability that the globe enters a bit of a recession is certainly not zero."

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The price for bullion rallied $23 (U.S.) to $1,604 an ounce in late trading. Gold shares were the strongest sector in Toronto.

Patricia Mohr, a commodity specialist at Scotia Capital, says bullion rallied on hopes for more quantitative easing, or a form of money printing, by the Federal Reserve Board in the U.S.

Markets also took heart from a report that there is support for granting Europe's bailout fund a banking licence, which would give it access to funding from the European Central Bank. The U.S. dollar was also weaker, making gold cheaper for buyers in other currencies.

"If you get QE3 in the next several months in the United States, I think gold will have another leg up," Ms. Mohr said. "If you don't get it there will be disappointment again."

Among gold stocks, junior companies had the best performances, with Nevsun Resources surging 9.8 per cent, Kirkland Lake Gold, up 9.6 per cent Detour Gold adding 7.2 per cent.

Teck Resources Ltd. plunged 7.3 per cent after the coal and base metal miner reported disappointing second-quarter results. Profit fell to 53 cents a share, compared with $1.12 in 2011.

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Canadian Pacific Railway Ltd. powered ahead by 5.2 per cent after reporting first half results that exceeded expectations.

Share profit rose 49 per cent even though the railroad incurred costs due to a strike, tax changes, and one-time advisory expenses.

Encana Corp. sagged 3.2 per cent after the energy giant reported a second-quarter loss due to an asset write down caused by low natural gas prices.

In the U.S., Apple Inc.quarterly results missed expectations and the stock lost 4.3 per cent.

RadioShack Corp. reported a quarterly loss and suspended its dividend. The shares tanked by 29 per cent.

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