The S&P/TSX composite index was up 36.3 points to 11,903.2 after strong manufacturing data from the U.S. and China raised commodity prices and lifted the main index 121 points.
The Canadian dollar climbed 0.53 of a cent to 96.55 cents US, its highest level since mid-October, as the U.S. currency weakened for a second day. The loonie ran ahead 0.87 of a cent on Monday after comments by U.S. Federal Reserve chairman Ben Bernanke pushed the expectations for interest rate hikes further out into 2010.
The base metals sector ahead 1.49 per cent with the March copper contract in New York up two cents at US$3.42 a pound. Teck Resources (TSX:TCK.B) gained 77 cents to $39.78.
The gold sector climbed one per cent as the February bullion contract in New York rose $8 to US$1,126.30 an ounce. Barrick Gold Corp. (TSX:ABX) gained 43 cents to $42.51.
The market also found strong support from potash producers after Credit Suisse raised Potash Corp. (TSX:POT) to outperform. It said the company along with Uralkali of Russia will lead a rebound among suppliers of the crop nutrient and believes sales volumes in the industry could double this year. Potash shares ran up $5.92 to $122.61 while shares in rival Agrium Inc. (TSX:AGU) advanced $2.11 to $67.65.
The consumer discretionary sector was the biggest percentage decliner, down 0.47 per cent with Shaw Communications (TSX:SJR.B) down 32 cents to $21.18.
Oil prices were slightly higher after the weak American currency helped push oil past the US$80 a barrel level for the first time since early November.
The February crude contract on the New York Mercantile Exchange was 10 cents higher to US$81.61 after surging more than $2 on Monday and the energy sector was ahead 0.14 per cent. EnCana (TSX:ECA) gained 36 cents to $36.07.
In the oilpatch, Noble Energy, Inc. (NYSE:NBL) will pay US$494 million to acquire the Rockies upstream assets of Petro-Canada Resources (USA) Inc. and Suncor Energy (Natural Gas) America Inc. (TSX:SU). The transaction is expected to close in the first quarter and Suncor shares rose 45 cents to $38.75.
The financial sector was also weak as Scotiabank (TSX:BNS) lost 47 cents to $48.46.
In Canadian economic news Tuesday, the industrial product price index increased one per cent in November, while the raw materials price index rose 2.2, mainly due to higher prices for petroleum and metals. Statistics Canada reported that the rebound in the industrial index was the strongest since June 2008.
The TSX Venture Exchange moved ahead 8.31 points to 1,552.24.
New York markets were weak following solid gains on Monday as investors took in some mixed economic data.
Orders to U.S. factories posted a surprisingly big gain of 1.1 per cent in November, reflecting strong demand in a number of industries from steel and industrial machinery to computers and chemicals. The advance was double what had been expected and provided further evidence that manufacturers are beginning to pull out of their steep slump.
But the number of buyers who agreed to purchase previously occupied homes fell sharply in November. The National Association of Realtors says its seasonally adjusted index of sales agreements fell 16 per cent from October to a November reading of 96. The drop was far larger than the two per cent decline that economists expected. It was also the first decline following nine straight months of gains and the lowest reading since June.
The Dow Jones industrial average fell 23.4 points to 10,560.5 after running up 156 points.
The Nasdaq composite index moved 0.24 of a point lower to 2,308.18 while the S&P 500 index added 1.2 points to 1,134.2.
Investors are also looking to key employment data coming out of Canada and in particular the U.S. at the end or the week. Hopes are high that a long string of severe job losses has come to an end _ and that such a message would raise consumer confidence.
``I think it's going to be flat and flat is going to be very bullish,'' said Don Reed, president and CEO of Franklin Templeton Investments Corp.
``We really need to see the consumer to get out there and start spending (and) we have to see some jobs created. And if we see a small amount of creation, something small is going to probably get the consumer more oriented towards spending.''
Warren Buffett's Berkshire Hathaway Inc. says it voted against food maker Kraft Inc.'s proposal to issue 370 million shares to finance its bid for British candy maker Cadbury PLC. Kraft has offered US$16.5 billion in cash and stock for Cadbury, which has rejected the offer.
Berkshire Hathaway owns about 138.3 million, or 9.4 per cent, of Kraft's shares. Kraft on Tuesday increased cash part its US$16.5 billion offer for Cadbury after agreeing to sell its North American pizza business to Nestle.
Overseas, Hong Kong's Hang Seng moved up 2.1 per cent and Shanghai's main stock measure climbed 1.2 per cent. Tokyo's Nikkei 225 stock average added 0.3 per cent.
London's FTSE 100 was ahead 0.52 per cent, Frankfurt's DAX lost 0.02 per cent while the Paris CAC 40 was up 0.09 per cent.
