The S&P/TSX composite index moved ahead 171.86 points to 11,596.56, with all sectors in positive territory save for the information technology index, which was hit by a 20 per cent drop in Research In Motion (TSX:RIM).
The TSX Venture Exchange added 27.53 points to 1,190.99. The TSX was up 0.62 per cent for the week, which also closed out the second quarter of 2012.
EU leaders agreed to pump money directly into stricken banks, let some countries tap into rescue money without submitting to stringent budget requirements and, later, tie European governments closer in economic union.
"The agreement is solid step in the right direction for Europe," said Benjamin Reitzes, senior economist at BMO Capital Markets.
"(But) markets tend to lose patience quickly and these measures may not be enough to contain worries for the next six months. Clearly more steps need to be taken," said Reitzes, noting that "Eurobonds weren't even mentioned in the statement."
Still, he said Europe's moves were "positive steps (that) should be recognized for what they are … solid progress."
Wall Street was also buoyed by the news. The Dow Jones added 277.83 points to 12,880.09 and the S&P 500 was up 33.12 points at 1,362.16, while the Nasdaq gained 85.56 points to 2,935.05.
The Canadian dollar jumped 1.04 cents to 98.44 cents US as the price of oil and gold both headed higher.
The price of oil posted the biggest one-day increase in more than three years, with the August crude contract surged $7.27 to US$84.96 a barrel on the New York Mercantile Exchange on the theory that a cure to Europe's debt woes will remove one of the major drags on global growth.
The energy index was up 2.8 per cent on the TSX, with shares in Suncor Energy (TSX:SU) up four per cent or $1.14 to C$29.44.
The August gold contract gained $53.80 to US$1,604.20 an ounce, while the September copper contract moved up 17 cents to US$3.50 a pound. The mining index led the way higher, up 4.7 per cent with shares in Teck Resources (TSX:TCK.B) ahead four per cent or $1.24 at C$31.53.
While rising commodity stocks buoyed the TSX, RIM dragged the information technology sector down 2.9 per cent.
The BlackBerry maker reported dismal earnings results after the close of markets on Thursday and announced another delay to the launch of its new smartphones.
The Waterloo, Ont.,-based company also said it would lay off a third of its workforce — or about 5,000 employees — to contain costs. Shares in RIM fell 20 per cent or $1.92 to close at $7.54.
In economic news, Statistics Canada reported Friday that Canada's economy had a second consecutive month of growth in April, building momentum with a 0.3 per cent increase in gross domestic product compared with March.
The economy took a step backwards in February — when output was affected by a number of production shutdowns — but resumed growth in March, when the GDP advanced by 0.1 per cent.
Also on Friday, the Conference Board of Canada said that its help-wanted index gained 1.1 percentage points in May. That continued an upward trend that began late last year, but one that has weakened recently, partly due to a sizable decline in the index in March.
Meanwhile, the U.S. Commerce Department said Friday that U.S. consumer spending showed no gain in May, the weakest monthly figure since spending was similarly unchanged in November.
In corporate news, Canadian Pacific Railway (TSX:CP) named Hunter Harrison as its new president and chief executive officer, the result of changes pushed through by the company's largest shareholder. Harrison's appointment was widely expected after a high-profile battle waged against the railway's former leadership by William Ackman, head of a New York-based investment fund. The stock added $1.20 to $74.72.
Bombardier (TSX:BBD.B) shares gained four cents to $4.02 after a consortium including Bombardier Transportation received the green light to supply an additional 210 rail cars worth US$1.3 billion to the Greater Paris commuter network. As a consortium member responsible for a third or the order, the Berlin-based division of the company will realize US$417 million from the order.