The S&P/TSX composite index gained 73.25 points to 12,758.38 on top of four straight weeks of gains as traders also looked towards a busy earnings week for Canadian corporations.
The Canadian dollar was ahead 0.21 of a cent to 96.67 cents US.
U.S. indexes were lacklustre amid an earnings disappointment from McDonald's and some weakness from the housing sector as the Dow Jones industrials added 1.81 points to 15,545.55, the Nasdaq was 12.77 points higher to 3,600.39, while the S&P 500 index rose 3.44 points to a new record high of 1,695.53.
Overall, earnings at U.S. companies have shown more positive surprises than disappointments.
But McDonald's fell short of expectations Monday as the world's biggest fast-food purveyor said second-quarter profit rose to US$1.4 billion, or $1.38 a share, from $1.35 billion, or $1.32 a share, a year earlier. Sales rose two per cent to $7.08 billion. Analysts had expected earnings of $1.40 a share on sales of $7.08 billion. Don Thompson, president and chief executive officer, said he expects the results for the rest of 2013 "to remain challenged" and shares of McDonald's fell 2.7 per cent to $97.58.
In Canada, Canadian National Railway (TSX:CNR) reported earnings per share of $1.69, seven cents better than forecast and up from $1.44 a year ago. Revenue was $2.67 billion versus the $2.7 billion that analysts had expected. CN shares had closed down 49 cents to $105.06.
Railway giant Canadian Pacific (TSX:CP) reports earnings on Wednesday.
Also after the close, online video streaming company Netflix handed in earnings of 49 cents US, nine cents better than expectations. Revenue of $1.07 billion matched expectations.
On the economic front, existing home sales fell by 1.2 per cent in June to a seasonally adjusted annual rate of 5.08 million but remained near a 3 1/2 year high. Economists had expected a rise of 1.4 per cent.
The gold sector continued to claw back some of the steep losses racked up so far this year, with the component up about 6.5 per cent while August bullion ran up $43.10 to US$1,336 an ounce, climbing above $1,300 for first time in a month. It was the biggest one-day gain since June 2012.
"Gold stocks have come down so much, and we have a bit of a rally in gold prices and people are starting to move in and say these things got oversold," said Ian Nakamoto, director of research at MacDougall, MacDougall and MacTier.
"I think something like a Goldcorp is sort of implying a price of $800 an ounce, which is way too low. Could it get there? Sure, in a real bear market, but I think in general, the stocks have come down percentage-wise much greater than the bullion."
The TSX global gold sector is still down 35 per cent year-to-date, but it earlier had been down about 50 per cent, while the price of bullion is only down 20 per cent so far in 2013.
Prices were close to US$1,500 an ounce in early May but started to drop later that month after Federal Reserve Chairman Ben Bernanke said the central bank could start tapering its monthly US$85 billion of bond purchases if economic conditions warrant. But prices started to revive after Bernanke said last week that the economy still needs stimulus.
On Monday, Barrick Gold Corp. (TSX:ABX) ran up $1.09 to C$18.25 while Goldcorp Inc. (TSX:G) improved by $1.63 to $29.97.
The base metals sector was ahead 1.5 per cent while September copper was up five cents to US$3.19 a pound. Teck Resources (TSX:TCK.B) gained 49 cents to C$23.97. Teck is the biggest Canadian mining company to report this week and analysts forecast the Vancouver-based company will post adjusted earnings of 33 cents a share on Thursday, down from 53 cents a year ago.
The energy sector was up a slight 0.2 per cent as the soft housing data helped push the September crude contract on the New York Mercantile Exchange down 93 cents to US$106.94 a barrel.
But prices have still jumped about 10 per cent this month, underpinned by three weeks of declining U.S. stockpiles. Rising prices have lifted TSX energy stocks and the sector has gained more than five per cent this month. Cenovus Energy (TSX:CVE), which reports earnings Wednesday, climbed 23 cents to C$32.48.
A lower dollar helped support commodity prices because a weaker greenback makes it less expensive for holders of other currencies to buy oil and metals which are dollar-denominated.
The telecom sector was the biggest decliner, down two per cent. BCE Inc. (TSX:BCE) was 99 cents lower to $42.30 while Rogers Communications (TSX:RCI.B) fell 93 cents to $41.15. Rogers posts its quarterly earnings on Wednesday.
In other resource sector earnings, gold miner Agnico-Eagle Mines and gas giant Encana (TSX:ECA) report on Wednesday, while Husky Energy (TSX:HSE) will post its results Thursday.
Outside of the resource sectors, grocer Loblaw Cos. Ltd. (TSX:L) reports results Wednesday.
In other corporate news, Intact Financial Corp. (TSX:IFC) says several recent Canadian disasters, including flooding in Alberta, the Lac-Megantic train derailment and a heavy rain storm in the Toronto area, will result in more than $270 million of losses in its second and third quarter. The Toronto-based company is one of Canada’s largest property insurers. Its shares gained $1.85 to $59.38.