The S&P/TSX composite index gained 25.13 points to 12,090.68 led by advances in the gold sector after the group fell more than 10 per cent last week.
The Canadian dollar was up 0.02 of a cent to 97.46 cents US.
U.S. indexes were mixed amid data showing that sales of previously occupied U.S. homes dipped in March. The National Association of Realtors said Monday that sales were down to a seasonally adjusted annual rate of 4.92 million, from 4.95 million in February. February’s figure was revised lower.
Sales in March were 10.3 per cent higher than a year earlier.
"The market is becoming more sensitive to economic news," said Kash Pashootan, portfolio manager at First Avenue Advisory in Ottawa, a Raymond James company.
"When markets do appreciate considerably over a short period of time, they need to get that much more attractive evidence to keep that momentum going."
The Dow Jones industrial average gained 19.66 points to 14,567.17, the Nasdaq composite index added 27.5 points to 3,233.55 while the S&P 500 index was up 7.25 points to 1,562.5.
Heavy equipment maker Caterpillar posted first-quarter profit of $1.31 a share on revenue of US$13.2 billion. Analysts surveyed by FactSet had expected profit of $1.36 a share on revenue of $13.8 billion. Caterpillar also cut its 2013 outlook.
However, the reduced outlook wasn't entirely unexpected and there were some bright spots. Sales in China rose compared to a year ago. And the company is "becoming more optimistic" on the U.S. housing sector. It says it plans on buying back shares — about $1 billion worth — for the first time since 2008. Caterpillar shares gained $2.28 to $82.71.
Meanwhile, substantial losses on commodity markets dragged the resource-heavy TSX last week into negative territory for the year after data showing a weakening Chinese economy and a downgrade of global economic growth by the International Monetary Fund raised demand concerns. The main index lost 2.2 per cent last week and is down about three per cent year to date.
"We’re in the late innings of this commodity boom," added Pashootan.
"We’re scratching our heads saying, 'When will commodity prices go back up?' Well, we’re thinking of the days when China was expected to grow at 10 or 12 per cent a year. They’re at eight and revising down."
Earnings disappointments also led U.S. futures to their worst week of 2013 with the Dow giving back 2.13 per cent even though the blue chip barometer is still up 11 per cent year to date.
The gold sector led advancers, up about two per cent as bullion prices advanced with the June contract in New York ahead $25.60 to US$1,421.20 an ounce. Bullion plunged to its lowest level in more than two years last week, falling seven per cent amid a growing conviction that inflation is firmly under control. Buying gold as a hedge against inflation has supported gold prices to record highs of almost $2,000 back in 2011. Goldcorp Inc. (TSX:G) improved by 73 cents to $29.32.
The energy sector also provided lift, up 1.2 per cent while the May crude contract on the New York Mercantile Exchange, which expired Monday, rose 75 cents to US$88.76 a barrel after prices fell three per cent last week. The June contract advanced 92 cents to US$89.19. Canadian Natural Resources (TSX:CNQ) was up 45 cents to $29.90.
The base metals sector was ahead 0.25 per cent while copper prices continued to hover at 18-month lows. The metal, widely viewed as an economic barometer because of its use in so many applications, fell two cents to US$3.13 a pound on top of a six per cent slide last week. Teck Resources (TSX:TCK.B) ran ahead 80 cents to C$26.01.
The financials sector led declines, moving down per cent as Royal Bank (TSX:RY) gave back 48 cents to $60.97.
The industrials sector was down slightly as Canadian National Railway (TSX:CNR) released earnings a couple of hours ahead of schedule.
The rail company posted net earnings of $555 million or $1.30 a share, down from $755 million a year earlier as it dealt with extreme cold and heavy snow in Western Canada, which hampered operations, congested the network and constrained volume growth. Ex-items, earnings were $519 million, or $1.22 per diluted share, one cent ahead of forecasts, and its shares were down 84 cents to $97.64.
Air Canada (TSX:AC.B) tumbled 38 cents or 12.67 per cent to $2.62 after earlier going as low as $2.46. The carrier said it estimates it had a $260-million net loss in the first three months of this year, down from $274 million in the first quarter of 2012. The company said it issued the preliminary report ahead of the full results and analysis on May 3 to comply with disclosure rules as it explores a range of debt financing options.
In other earnings news, Rogers Communications Inc. (TSX:RCI.B) reported after the close that first-quarter net income rose 15 per cent to $414 million from $360 million. Revenue increased to $3.03 billion from $2.94 billion. Its shares closed 32 cents higher to $52.08.
The TSX Venture Exchange gained 5.28 points to 944.35.Suggest a correction