The S&P/TSX composite index jumped 209.94 points to 14,547.71 as traders continued to snap up stocks beaten down over the course of a market sell-off that started last month. The selling pressure was ignited in part by worries about the state of the global economy and the impending end of a key stimulus measure by the U.S. Federal Reserve, its bond purchase program.
Tuesday's gains — four triple-digit advances in a row — left the TSX down just seven per cent from the record highs reached last month. It had been down almost 12 per cent at its worst levels last week. The TSX is still up six per cent year to date.
But analysts say it would be a mistake to think that the market's retracement has run its course and that indexes will resume going more or less straight up.
"You will see more volatility, bigger swings in the markets and more emphasis on the news that comes through," said Sadiq Adatia, chief investment officer for Sun Life Global Investment.
"(It will be) more of a see-saw environment. But we still think it’s a see-saw heading upwards."
The Canadian dollar was ahead 0.44 of a cent to 89.06 cents US.
Data showing U.S. homes sold in September at their fastest clip this year helped send New York indexes sharply higher as the Dow Jones industrials surged 215.14 points to 16,614.81, the Nasdaq soared 103.41 points to 4,419.48 and the S&P 500 index jumped 37.27 points to 1,941.28.
The Dow and the S&P 500 are both off just four per cent off their September highs.
Canadian Pacific Railway's (TSX:CP) quarterly net income was up 23 per cent from a year ago to $400 million or $2.31 per share, missing estimates of $2.35 a share. CP also said that revenue came in at $1.67 billion, up nine per cent but missing estimates of $1.69 billion. The railway's operating ratio, a key efficiency metric, improved more than expected to a record low of 62.8. CP shares climbed $2.93 cent to $224.58.
Canadian National Railway (TSX:CNR) missed earnings estimates. It reported after the close that adjusted earnings per share came in at $1.04, a penny short of expectations and reaffirmed its financial outlook. Its operating ratio also improved, falling to 58.8 from 59.8 per cent.
Commodity prices also advanced Tuesday even as China's economic growth slowed to 7.3 per cent last quarter. That is lower than the 7.5 per cent rate that had been targeted by Chinese leaders, who are trying to steer China toward growth based on domestic consumption instead of overreliance on trade and investment.
But the number was broadly in line with expectations and higher than some estimates that had pegged growth at 7.2 per cent for the quarter.
Most TSX sectors advanced with the base metals sector in the lead, rising three per cent as December copper was ahead four cents to US$3.03 a pound.
The energy sector was up 2.1 per cent even as the November crude contract, which expired Tuesday, rose 10 cents to US$82.81 a barrel. The December contract ran up 58 cents to US$82.49.
Financial stocks were a major source of support with the sector ahead 1.25 per cent.
The gold sector was the only decliner, down about one per cent while December gold rose $7 to US$1,251.70 an ounce.