The Toronto Stock Exchange Broadcast Centre in Toronto.MARK BLINCH
Stocks bounced on Tuesday as investors grew more optimistic that Greece will be able to avoid a default on its bonds, after the government was close to winning support for its economic reforms. As well, U.S. existing home sales were better than expected raising hopes that the economy isn't in as bad shape as some observers thought.
The Dow Jones industrial average closed at 12,190.01, up 109.63 points or 0.9 per cent. The broader S&P 500 closed at 1295.52, up 17.16 points or 1.3 per cent. In Canada, the S&P/TSX composite index closed at 13,063.32, up 205.62 points or 1.6 per cent, marking its biggest one-day gain in three months.
Economically sensitive stocks dominated the gains, suggesting that investors were betting on a stronger global economy. Among U.S. stocks, Alcoa Inc. rose 4 per cent, Caterpillar Inc. rose 3.3 per cent and DuPont rose 2.6 per cent. Meanwhile, defensive stocks lagged: Procter & Gamble fell 1.3 per cent and Johnson & Johnson was unchanged.
Sino-Forest Corp. plunged 27.1 per cent - but bounced from an earlier low - after it was disclosed in a regulatory filing that hedge fund manager John Paulson had ditched his holdings of the embattle Chinese forestry company.
Meanwhile, Research In Motion Ltd. bounced following two sharp days of declines, rising 9.2 per cent in Toronto.