Canada's benchmark stock index gained 1.5% as markets rebounded Wednesday thanks in part to signals that the U.S. economy is continuing to recover.
The S&P/TSX composite index rose 206.12 points to 13,465.75, with nine of its 10 sub-indexes gaining, led by materials. Financials was the only sector to post a decline in the broad-based rally.
The price of crude oil rose US$1.14 to US$87.33 a barrel. Gold recovered earlier losses to close with a US70¢ gain at US$1,333.00 an ounce.
The Canadian dollar advanced by 23 basis points to US100.47¢.
The U.S. Federal Reserve open market committee announced Wednesday that it was holding the line on interest rates, and reiterated its commitment to pump an additional US$600 billion into the economy. The committee noted that "recovery is continuing" "but at a rate that has been insufficient to bring about a significant improvement in labour market conditions."
"Economic data published in recent weeks leaves us confident that the combination of monetary and fiscal policy stimulus will lead to a significant improvement in U.S. labour markets in the coming months," Paul-Andre Pinsonnault, senior fixed-income economist with National Bank Financial Group, wrote in a note.
"Furthermore, recent banking data showed that lending activity for commercial and industrial loans might finally be coming out of its doldrums. This could be an indication that the economic recovery is on stronger footing."
A report from the U.S. Commerce Department that home sales rose more than expected in December helped propel the Dow Jones industrial average to the 12,000 mark for the first time since June 2008, though the index slipped back before the close to finish at 11,985.44 -- a gain of 8.25 points, or 0.07%. The Nasdaq composite rose 20.25 points, or 0.74%, to close at 2,739.50.
Canada's junior Venture exchange rose 47.82 points, or 2.17%, to 2,250.50.
Better-than-expected earnings reports from Canadian Pacific Railway Ltd. and CGI Group Inc. helped propel gains in Toronto on Wednesday. CP Rail shares rose 2.91% to $68.26 after the company announced a 27% increase in fourth-quarter earnings. CGI reported earnings of 45¢ a share -- well above the 34¢ a share estimated by analysts -- and saw its shares surge 5.02% to $19.68.
Materials producers saw some of the biggest gains on Wednesday. Barrick Gold Corp. gained 3.61% to $47.59, and Kinross Gold was up 5.17% to $17.09. Copper producer Teck Resources rose 3.06% to $60.91
