The S&P/TSX composite index gained 62.52 points to 12,202.85 while the TSX Venture Exchange climbed 13.01 points to 1,218.38
Traders also took in an earnings report from Royal Bank (TSX:RY) that beat expectations. The bank posted quarterly net earnings of $1.9 billion or $1.25 a share. Adjusted net earnings came in at $1.27 a share, beating estimates by a penny.
RBC also handed in a record full-year profit of $7.5 billion, up 17 per cent from 2011. Its shares were 26 cents higher to $58.61.
The Canadian dollar was down 0.09 of a cent to 100.73 cents US.
U.S. indexes were higher, but off the best levels of the session after House Speaker John Boehner expressed disappointment with the pace of talks with the White House to avoid going over the fiscal cliff.
Following a meeting with Treasury Secretary Tim Geithner, he said Republicans have put concessions on the table, but President Barack Obama still has to outline the spending cuts he's willing to make.
"We have a debt crisis, it’s the spending that is out of control," he told reporters following the meeting.
Shortly after, Senate Majority Leader Harry Reid chimed in, saying President Obama is still waiting for a serious offer from Republicans.
"We need Republicans to come forward with something," he said.
The Dow Jones industrials was up 36.71 points to 13,021.82.
The Nasdaq was up 20.25 points to 3,012.03, while the S&P 500 index climbed 6.02 points to 1,415.95.
Traders have been focused on negotiations aimed at avoiding the fiscal cliff, the name for sharp tax increases and spending cuts that would occur in January without a deal. There are fears that the combination could deliver a shock to the economy that would result in knocking the U.S. back into recession.
Markets have been whipsawed as every day seems to bring a new assessment of where negotiations stand. Traders were reassured Wednesday and markets advanced after House Speaker John Boehner said he was optimistic that a deal can be reached with the president.
Optimism was further bolstered after Obama said that he believes that members of both parties can reach a "framework" on a debt-cutting deal before Christmas.
Analysts believe that would suit markets just fine since expectations for a full deal covering everything on the table just isn't realistic.
"Do you get a nice, sweet all-agreed-to-sum-up deal together in one great big shot by Dec. 31? No," said Gareth Watson, vice-president Investment Management and Research, Richardson GMP Ltd.
"That’s something that is going to take a lot more time to figure out. So you get some type of deal which essentially carries us through to the new Congress, delays the pending cliff in terms of tax increases and spending cuts for another month or two."
The tech sector led advances and Research In Motion Ltd. (TSX:RIM) shares ran up 48 cents or 4.36 per cent to $11.48 after Goldman Sachs upgraded the BlackBerry maker to buy from neutral. RIM stock has boosted over the last couple of weeks on upgrades and optimism as it prepares to unveil its new BlackBerry 10 lineup at the end of January.
The base metals sector was ahead about one per cent as March copper on the New York Mercantile Exchange gained seven cents to US$3.61. Inmet Mining (TSX:IMN) rose $3.50 or 5.65 per cent to C$65.50 a day after it rejected an unsolicited takeover offer worth $4.9 billion by First Quantum Minerals Ltd. (TSX:FM). Thompson Creek Metals (TSX:HBM) gained 10 cents to $2.83.
The energy sector moved ahead 0.5 per cent as January crude rose $1.58 to US$88.07 a barrel. Canadian Natural Resources (TSX:CNQ) advanced 30 cents to C$28.45 while Cenovus Energy (TSX:CVE) was 35 cents higher to $33.07.
The financials sector was up almost one per cent in the wake of the Royal Bank results. Other advancers included TD Bank (TSX:TD), up $1.15 to $82.67 while Manulife Financial (TSX:MFC) advanced 21 cents to $12.83.
The gold sector was flat with February bullion ahead $10.70 to US$1,727.20 an ounce. Goldcorp Inc. (TSX:G) faded 35 cents to C$38.96.
Positive momentum had earlier been maintained in part because of data showing the economy grew at an annualized rate of 2.7 per cent during the third quarter, which was much better than the two per cent rate estimated a month ago.
Still, most economists say growth has slowed since then to below two per cent in the October-December quarter.
One reason is that superstorm Sandy halted business activity along the East Coast in late October and November. And many businesses and consumers could end up scaling back on spending in the final weeks of the year, if lawmakers fail to avert the "fiscal cliff."
Indexes had also softened on news that major U.S. retailers such as Kohl’s, Target and Macy’s reported weak sales in November as a strong Thanksgiving weekend wasn’t enough to fully offset a slow start to the month caused by superstorm Sandy.
In other earnings news, Gildan Activewear Inc. (TSX:GIL) said quarterly net income jumped to US$89 million or 73 cents per share, up from US$48.5 million a year ago. Ex-items, earnings came in at $94.9 million or 78 cents per share, a penny short of estimates. Gildan also said it will increase its quarterly dividend to shareholders by 20 per cent, which will be nine U.S. cents a share and its stock rose 89 cents to C$33.98.