The S&P/TSX composite index soared 161.65 points to 14,594.03, boosted by gains from metals and mining and energy stocks.
The Canadian dollar climbed 0.05 of a cent to 85.98 cents US.
Statistics Canada reported that gross domestic product rose by 0.3 per cent in October, beating economists' expectations of 0.1 per cent growth for the month, following September's reading of 0.4 per cent. The federal agency said growth was broad-based, attributing it to several major sectors of the economy — especially oil and gas extraction, mining and manufacturing.
"I think it's just that time of year that the market is looking for good news. That just happens to be the news lifting the markets," said Ian Nakamoto, director of research at 3Macs.
Nearly all sectors on the TSX were higher, led by a gain of 2.8 per cent for metals and mining stocks and a 1.88 per cent gain in energy stocks. The gold sector was the largest decliner, down 1.09 per cent.
In the U.S., the Commerce Department revised upwards its GDP growth figures for the third quarter to five per cent from a previous figure of 3.9 per cent. Economists had expected the revision to show growth of 4.3 per cent.
The pace was the fastest quarterly growth since the summer of 2003 and followed a 4.6 per cent annual growth rate in the April to June quarter. The Commerce Department said consumer spending and business investment accounted for the majority of the improvement.
U.S. consumer spending rose at the fastest pace in three months in November, while income posted the best gain in five months. The Commerce Department said consumer spending increased 0.6 per cent in November, double the 0.3 per cent gain in October and the best showing since August. Consumer spending is closely watched because it accounts for about 70 per cent of U.S. economic activity.
Meanwhile, U.S. new home sales slipped 1.6 per cent in November — a sign that stronger job growth has not yet boosted that industry segment.
The mostly positive data helped lift Wall Street, as the Dow Jones industrials advanced 64.73 points to 18,024.17, its first-ever close above the 18,000-mark, while the S&P 500 index added 3.63 points to 2,082.17. Both were records. The Nasdaq declined 16 points to 4,765.42.
Trading volumes were expected to be lower this week, with both the Toronto and New York markets set to close at 1 p.m. ET on Wednesday and remain shut Thursday for Christmas. New York reopens on Friday, but the TSX will be closed for Boxing Day.
In commodities, the February crude oil contract added $1.86 to US$57.12 barrel.
Crude prices hit US$107 a barrel in June but have plunged nearly 50 per cent since then due to a big supply-demand imbalance, aggravated by a decision by Saudi Arabia and other members of the Organization of Petroleum Exporting Countries to maintain production levels in the face of a global supply glut.
"People may be looking at the glass half full, and saying there is some oversupply here, but demand may catch up," said Nakamoto.
The February gold bullion contract was down $1.80 at US$1,178 an ounce, while March copper was down a penny at US$2.87 a pound.
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