But the market was also pressured by declines in industrials and interest-sensitive stocks such as utilities and telecoms and closed two points lower to 12,760.3.
Traders also looked to another piece of economic data that kept speculation going over whether the U.S. Federal Reserve thinks the economy is strong enough to start backing off on some of its economic stimulus.
The U.S. Commerce Department reported that durable goods orders fell by a much greater than expected 7.3 per cent in July. Economists had expected a drop of almost four per cent. The showing followed a 3.9 per cent rise in June, thanks in part to strong airplane orders.
Data released Friday showed a drop in new home sales, raising questions about the strength of the recovery in the U.S. housing market. That led to speculation that the Fed might stick with its current monetary stimulus or only reduce it very gradually.
The Canadian dollar closed down 0.02 of a cent to 95.21 cents US, well off early lows as the greenback weakened somewhat after the durable goods data.
The U.S. dollar has advanced amid growing conviction that the Federal Reserve will start cutting back on its US$85 billion of monthly bond purchases, a move that has kept long-term rates low and supported a strong rally on many stock markets this year.
U.S. indexes were negative with the Dow Jones industrials down 64.05 points to 14,946.46, the Nasdaq off 0.22 of a point to 3,657.57 and the S&P 500 index declined 6.72 points to 1,656.78.
The base metals sector advanced one per cent while September copper shed early advances to fall three cents to $3.32 a pound. Prices found support last week after HSBC's purchasing managers index showed Chinese manufacturing moving back into expansion territory.
"I think the turn we have seen most recently in the TSX has benefited from (the fact that) we’re starting to see very credible signs of stabilization in Europe, signs the Chinese economy may be bottoming out (and) that speaks well to commodity demand," said Craig Fehr, Canadian markets specialist at Edward Jones in St. Louis.
"This has really put some enthusiasm and some confidence back into the global investment story that is going to continue to benefit the TSX."
Thompson Creek Metals Co. (TSX:TCM) gained 19 cents to C$4.15 while First Quantum Minerals (TSX:FM) was up 48 cents at $18.83.
The gold sector was also ahead about one per cent as December gold also erased early minor gains to fall $2.70 to US$1,393.10 an ounce. Iamgold (TSX:IMG) gained 11 cents to C$7.17 and Barrick Gold (TSX:ABX) improved by 25 cents to $21.52.
Utilities led decliners. That component and other interest sensitive components such as telecoms have been under selling pressure while bond yields have risen since May when Fed chairman Ben Bernanke first mentioned that the central bank could start to taper its asset purchases.
"As we look at utilities and telecoms, the pressure there is really a reflection of the equity markets taking cues from the bond markets, and the fact that a shift in monetary policy is really starting to be priced into the market," Fehr said.
The benchmark 10-year U.S. Treasury has surged about 120 basis points since May to as high as 2.94 per cent last week, although yields have retraced some of that run-up. On Monday, the yield for the 10-year Treasury stood at 2.79 per cent.
Fortis Inc. (TSX:FTS) declined 31 cents to $30.16 and Canadian Utilities (TSX:CU) gave back 71 cents to $33.75.
The energy sector was off 0.2 per cent as the October crude contract on the New York Mercantile Exchange dropped 50 cents to US$105.92. Suncor Energy (TSX:SU) dipped 25 cents to $35.81.
Financials weakened during the afternoon as traders look to the release of earnings this week from Canada's biggest banks. Scotiabank (TSX:BNS) and Bank of Montreal (TSX:BMO) post results Tuesday.
On Monday, TD Bank Group (TSX:TD) said it is continuing talks with Aimia Inc. (TSX:AIM) and Canadian Imperial Bank of Commerce (TSX:CM) in connection with a possible acquisition of part of the existing CIBC Aeroplan credit card portfolio. CIBC shares rose 81 cents to $80.69 and TD gained 15 cents to $88.96.
In other corporate news, Onex Corp. (TSX:OCX) and a private equity affiliate are selling their combined 60 per cent stake in TMS International Corp. (NYSE:TMS) for US$410 million. TMS International Corp., through its subsidiaries including Tube City IMS, is the largest provider of outsourced industrial services to steel mills in North America as well as having a substantial international presence. Onex shares slipped 75 cents to C$51.Suggest a correction