TORONTO - Major acquisition activity in the Canadian mining sector helped to send the Toronto stock market higher early Wednesday. The S&P/TSX composite index gained 57.43 points to 13,458.49 shortly after the market opened while the TSX Venture Exchange rose 13.05 points to 2,278.78. Consolidated Thompson Iron Mines Ltd. (TSX:CLM) is being taken over by U.S. miner Cliffs Natural Resources Inc. (NYSE:CLF) for $4.9 billion. The American iron and coal producer said Tuesday that the deal will give it greater access to Asian markets. Cliffs is offering $17.25 per share in cash, which is a 30 per cent premium to Consolidated Thompson’s share price of $13.38 Tuesday on the Toronto Stock Exchange. Consolidated Thompson shares surged $4.49 or 33.4 per cent to $17.87 in early trading on the TSX. The all-cash deal also supported the Canadian dollar, which was up 0.37 of a cent to 101.41 cents US. Markets also rose as Germany's chancellor sought to reassure markets that her country will do whatever is necessary to stabilize the euro. However, it wasn't clear if Angela Merkel was saying Berlin would be prepared to increase the current eurozone rescue package. Merkel's comment came amid a relatively successful Portuguese bond auction which eased market worries that the country would soon need a financial bailout, though experts warned it is still not clear of danger. Analysts said the success of the auction has a lot to do with a more active role taken by the European Central Bank in recent days. The ECB has reportedly been buying Portuguese bonds in the markets in an attempt to get the yield down from unsustainably high levels of over seven per cent which were reached earlier this week. Commodity prices were mixed with oil prices higher for a third day as a 1,300-kilometre trans-Alaska pipeline — which normally carries about 620,000 barrels a day — remained shut after a leak was discovered Saturday at a North Slope pump station. Oil production on the North Slope was cut by 95 per cent. The February crude contract on the New York Mercantile Exchange added 50 cents to US$91.61 a barrel. The rise also came amid a report which showed U.S. gasoline supplies rose more than expected last week, suggesting demand may have slowed. The energy sector rose 0.7 per cent as Suncor Energy rose 37 cents to $37.80. Alberta has partly lifted a stop-work order to allow a crew to assess fire damage at Canadian Natural Resources’ (TSX:CNQ) Horizon oilsands upgrader. But the government says it is too early to say when the oil and gas producer will be allowed to begin repairs or resume production after an explosion and fire Friday at the project north of Fort McMurray. Canadian Natural shares were up 34 cents to $42.84. The Consolidated Thompson deal and rising copper prices helped send the base metals sector up 1.3 per cent. The March copper contract on the Nymex was up five cents to US$4.40 a pound. The financial sector also supported the TSX, up 0.45 per cent with Bank of Montreal (TSX:BMO) ahead 32 cents to $58.65 while Manulife Financial (TSX:MFC) improved by 12 cents to $17.67. Gold stocks were lower as bullion prices slipped with the February contract in New York down $4.90 to US$1,379.40 an ounce. Goldcorp Inc. (TSX:G) dipped 31 cents to $43.05. U.S. markets also headed higher as investors look to the release of the Federal Reserve's survey of regional economic conditions later in the day. New York's Dow Jones industrials ahead 50.64 points to 11,722.52. The Nasdaq composite index gained 7.7 points to 2,724.53 while the S&P 500 index was up 6.55 points to 1,281.03. In other corporate news, Lululemon Athletica Inc. (TSX:LLL) stock jumped $4.28 to $70.79 after the yogo clothing retailer raised its fourth-quarter earnings guidance due to stronger than expected sales. The company expects diluted earnings per share of 55 to 57 cents for the three months ended Jan. 30, up from earlier guidance 46 to 48 cents. Lululemon now expects net revenue to be in the range of $237 million to $239 million for the quarter, up from earlier guidance for between $210 million and $215 million. Magna International Inc. (TSX:MG) expects total sales for 2011 will come in between US$25.6 billion and US$27.1 billion, the Canadian autoparts giant announced Wednesday. Magna bases that projection on estimates that 12.9 million vehicles will be built in North America this year and 13.3 million units will be built in Western Europe. It shares dipped 64 cents to $58.95. Canadian Pacific Railway Ltd. (TSX:CP) plans to spend up to $1.05 billion on capital projects this year, including $680 million to renew its basic track infrastructure and $200 million to increase volume and productivity. Its shares added a penny to $66.25. CBC News reported that the federal government will give the long-delayed Mackenzie Valley natural gas pipeline the green light next week. It said that the controversial $16-billion pipeline would likely get approval at the next federal cabinet meeting but with one major caveat — no federal subsidies. Earlier in Asia, Japan’s Nikkei 225 stock average closed flat, while Hong Kong’s Hang Seng index rose 1.5 per cent and Australia’s S&P/ASX 200 advanced 0.3 per cent. South Korea’s benchmark Kospi closed at a record high for the second straight day, gaining 0.3 per cent to 2,094.95. London's FTSE 100 index was up 0.4 per cent, Frankfurt's DAX rose 1.37 per cent while the Paris CAC 40 gained 1.52 per cent.

Source