The S&P/TSX composite index lifted 32.40 points to 12,736.92 —an increase of about 1.6 per cent since last week and its highest close since July 23.
The Canadian dollar dropped 0.33 of a cent to 96.72 cents US after Statistics Canada reported that manufacturing sales fell in June for the fourth time in six months, dropping 0.5 per cent to $48.2 billion.
The TSX energy sector was up 0.8 per cent as the September crude contract rose 13 cents to US$107.06 a barrel as unrest in Egypt kept traders cautious over how the political situation there might affect supply through the region.
Though not an oil exporter, Egypt controls the Suez canal that links the Mediterranean Sea and the Red Sea, giving it a crucial role in maintaining global energy supplies.
Talisman Energy (TSX:TLM) shares were up 1.9 per cent to C$11.30, while Suncor Energy (TSX:SU) rose one per cent to $35.33.
Gold stocks fell while December gold bullion rose $10.10 to US$1,371.00 an ounce, closing at its highest level since June 19. September copper gained 2.6 cents to US$3.36 a pound.
Financial stocks also traded heavily, rising 0.1 per cent just over a week before Canada's biggest banks report their quarterly results. Royal Bank shares rose 50 cents to $64.36.
In the U.S., the Commerce Department reported that builders began work last month on houses and apartments at a faster pace. The seasonally adjusted annual rate of starts was up six per cent to 896,000.
On Wall Street, the Dow continued its decline, logging the worst two-day session since June, dropping 30.72 points to 15,081.47, the Nasdaq slid 3.34 points to 3,602.78 and the S&P 500 pulled back 5.49 points to 1,655.83.
Retailers in the United States continue to be pressured, with department store Nordstrom cutting its profit outlook for the year late Thursday. The company's restraint added to bleak outlooks from Wal-Mart and Macy's earlier this week, which have raised doubts that shoppers will spend enough to give the tepid U.S. economy a boost.
Traders have also been focusing on how the U.S. economy will influence timing for the U.S. Federal Reserve's winding down of its massive bond-buying program. Many expect the Fed will make its first move next month, though the exact timing is still uncertain.
The $85-billion-a-month monetary stimulus has been seen by many as one of the reasons that Wall Street has touched new highs in recent months.
In other corporate developments, BlackBerry (TSX:BB) shares gained 3.9 per cent, or 44 cents, to $10.86. Chief executive Thorsten Heins stands to make as much as $55.6 million if the company is sold and he is ousted from the top job, according to securities filings.