The S&P/TSX composite index gained 77.12 points to 14,289.86, led by base metal stocks.
The Canadian dollar gave up early gains to move down 0.13 of a cent to 90.09 cents US a day before the Bank of Canada's interest rate announcement and an expected election call by Quebec's minority PQ government.
U.S. indexes recovered from the major losses racked up Monday after Russian troops over the weekend invaded the Crimean peninsula, where Russia has major military installations and much of the population is Russian-speaking.
Although tensions are still high, they were ratcheted down somewhat after Russian President Vladimir Putin ordered tens of thousands of Russian troops participating in military exercises near Ukraine’s border to return to their bases.
The Dow Jones industrials jumped 227.85 points to 16,395.88, the Nasdaq gained 74.67 points to 4,351.97 and the S&P 500 index ran up 28.18 points to 1,873.91.
Putin has said he hopes that Russia won’t need to use force in eastern Ukraine. The Kremlin, which does not recognize the new Ukrainian leadership, insists it made the move into Crimea in order to protect Russian installations in Ukraine and its citizens living there.
Analysts warn that the situation in eastern Europe still remains highly volatile for global markets.
"Note that this withdrawal of troops refers to exercises that ... the Russian authorities had always maintained were unrelated to Ukraine," said Adam Cole, head of G10 FX Strategy at RBC Capital Markets.
"It does not appear to have any bearing on Russian troops inside Crimea. As such, markets will remain sensitive to Ukraine-related headlines and further bouts of risk aversion are likely."
Meanwhile, Scotiabank (TSX:BNS) reported $1.71 billion of quarterly net income, up 6.5 per cent from a year earlier. Ex-items, earnings came in at $1.34 a share, which met estimates. The bank is raising its dividend three per cent to 64 cents a share and its shares gained nine cents to $63.12.
"If you look to see where the earnings came from, a lot of it was domestic," said Allan Small, a senior adviser at Holliswealth, observing that Scotiabank has had the most exposure to emerging markets of the big banks.
"And right now, the emerging markets are struggling. They had a great run for a long time and now everyone is kind of stepping back."
RadioShack will close up to 1,100 U.S. stores as the electronics retailer reported a quarterly loss of $191.4 million, up sharply from a $63.3-million loss a year earlier. Excluding items, the electronics retailer lost $1.29 per share against the 16 cents that analysts expected and its shares plunged 17.28 per cent in New York.
Most TSX sectors advance with the base metals segment in the lead, up 2.89 per cent as May copper clawed back Monday's two-cent loss and then some, up four cents to US$3.21 a pound.
Oil and gold gave back a good-sized chunk of the gains racked up on Monday with the April crude contract in New York down $1.59 to US$103.33 a barrel. The energy sector rose 0.28 per cent.
The gold sector was off about 0.55 per cent as April bullion faded $12.40 to US$1,337.90 an ounce.