11/15/2013 12:18 EST | Updated 01/23/2014 06:58 EST

TSX hits 2-year high of nearly 13,500

The Toronto Stock Exchange hit its highest level in more than two years on Friday on signs the U.S. is in no hurry to remove stimulus, and China's pledging to open up its economy.

The S&P/TSX composite index rose 32.21 points to 13,463.59 at midday. That modest gain was about the same as the one seen in New York, where the Dow Jones was up 48.94 points to 15,925.16, the Nasdaq was up 5.4 points to 3,978.14 while the S&P 500 index gained 3.29 points to 1,793.91.

The real for the cautious optimism was news out of Washington that the person likely to be the next head of the Federal Reserve signalled she's prepared to continue the central bank's low-interest rate policies to keep the U.S. economic recovery on track.

Cheap borrowing remains

During a confirmation hearing before the Senate Banking Committee, Janet Yellen warned critics that any potential risks posed by those policies are outweighed by the risk of leaving a still-weak economy to survive without them.

Her statements convinced markets that the central bank won't reduce its $85 billion US of monthly bond purchases until at least March.

Oil was higher, up 21 cents to $93.37 a barrel in New York. That was enough to light a fire under the energy sector. Suncor shares gained almost a per cent to $37.47. Canadian Natural Resources was up two per cent to $33.79 and Husky gained half a dollar to $30.63 per share.

Stock markets were also higher on word out of China that Beijing wants to reform its economy by making it easier for private companies to compete with state-owned enterprises there.

"It looks like they are going to do some reforms which should help out growth over time," said Sadiq Adatia, chief investment officer at Sun Life Financial.

"But I don't think it was as immediate and because of that, markets didn't take off (on the news). So it isn't negative, it isn't overly optimistic, just slightly positive."

The Canadian dollar rose 0.04 of a cent to 95.57 cents US.