The S&P/TSX composite index came back from a 210-point plunge to finish 33.08 points higher at 14,635.96.
There was also uncertainty about when the U.S. Federal Reserve is going to raise rates.
"It looks like they're going to go mid-year; that's another concern," said Ian Nakamoto, director of research at 3MACS.
The Canadian dollar lost more ground in the wake of Wednesday's announcement from the Federal Reserve, which left markets with the impression that the U.S. central bank will start hiking rates around the middle of this year. The loonie lost 0.57 of a cent to 79.3 cents US, its lowest level since late March 2009, adding to a drop of three-quarters of a cent on Wednesday.
The Fed said it would be patient in beginning to normalize monetary policy while at the same time it pointed out a string of positives about the American economy, including that economic activity is expanding at a solid pace.
U.S. markets put interest rate concerns aside and several homebuilders surged as data showed that completed home sales increased seven per cent in the fourth quarter.
The Dow industrials ran ahead 225.48 points to 17,416.85, the Nasdaq climbed 45.42 points to 4,683.41 and the S&P 500 index gained 19.09 points to 2,021.25.
Oil prices inched up slightly after plunging almost $2 Wednesday in the wake of figures showing U.S. crude inventories still at 80-year highs. The March contract came off a low of $43.58 to add eight cents to US$44.53 a barrel and the energy sector dropped 1.1 per cent.
A major decliner was Canadian Oil Sands. The company cut its quarterly dividend from 35 cents to five cents a share to preserve cash as it tried to cope with the 55 per cent plunge in oil prices since last summer.
The company announced in early January that it would be cutting the dividend from 35 cents to 20 cents, but said after markets closed Thursday that the outlook has deteriorated since then and slashed the planned payout further. Its stock had been halted mid-afternoon, when it was down 50 cents or 7.1 per cent at $6.51.
The base metals sector on the TSX fell 1.65 per cent as March copper fell three cents to US$2.44 a pound.
"The only thing good is that (miners) have a cushion with the lower Canadian dollar but that's not enough to offset the decline in copper — copper is off 30 per cent," noted Nakamoto.
Gold plunged as traders weighed the chances of the Fed moving rates up as early as June and February bullion declined $31.30 to US$1,255.90 an ounce and the gold sector faded 0.6 per cent.
TSX sectors outside the resource groups were positive, led by a 2.1 per cent rise in the tech sector and a 1.9 per cent run-up in consumer staples.
Meanwhile, PotashCorp (TSX:POT) posted quarterly income of $407 million or 49 cents per share, beating estimates of 47 cents. Revenue was $1.9 billion, compared with $1.5 billion a year ago and its shares added 12 cents to $45.48.
Rogers Communications Inc. (TSX:RCI.B) posted adjusted net income of $355 million or 69 cents a share, beating expectations of 64 cents. Its revenue was up four per cent at $3.37 billion. It also hiked its annual dividend by five per cent and its shares rose 31 cents to $44.86. Its shares gained $1.76 to $78.