TORONTO -

The Toronto stock market closed higher Wednesday as commodity stocks advanced in the wake of positive news from the U.S. banking and retail sectors and dealmaking in the Alberta oilpatch.

The S&P/TSX composite index jumped 197.1 points to 11,397.27 as investors continued to buy up stocks that have been beaten down recently as markets slipped away from their highs of the year. The TSX Venture Exchange was 13.96 points higher at 1,361.48.

The Canadian dollar was ahead 0.72 of a cent at 95.44 cents US.

French energy giant Total SA is acquiring a bigger stake in Alberta's oilsands industry through the purchase of UTS Energy Corp. (TSX:UTS) in a deal worth more than $1.5 billion. A subsidiary of Total will pay $3.08 per share in cash.

Besides the cash, shareholders of UTS would receive stock in SilverBirch Energy Corp. -- a new, publicly traded concern being set up as part of the deal. UTS, along with Teck Resources (TSX:TCK.B), own 40 per cent of the Fort Hills oilsands project. Suncor Energy (TSX:SU) owns the other 60 per cent. UTS shares soared $1.33 or 63.03 per cent to $3.44 on very heavy volume of 106.4 million shares. Teck shares gained $1.97 to $33.65 while Suncor climbed $1.27 to $32.50.

The market also found support from the U.S. retail sector after the International Council of Shopping Centres said sales probably expanded at an average monthly rate of four per cent in the first five months of the retail fiscal year that began Jan. 31. The ICSC said in advance of its June retail sales report Thursday that the showing would represent the biggest gain since 2006.

And investors were also pleased with a report that second-quarter profit forecasts at American bank State Street Corp. topped analysts' expectations. In New York, its shares moved ahead $3.32, or 9.96 per cent, to US$36.63.

The TSX energy sector gained 2.84 cent as oil prices gained ground after six losing sessions in a row.

The August crude contract on the New York Mercantile Exchange moved ahead $2.09 to US$74.07 a barrel as traders look to weekly crude supply data for signs of recovering U.S. demand. Canadian Natural Resources (TSX:CNQ) was up $1.01 to C$35.82 and EnCana Corp. (TSX:ECA) rose 82 cents to C$33.16.

Oil investors were mulling crude inventory levels announced by the American Petroleum Institute later Wednesday and the U.S. Energy Department's Energy Information Administration on Thursday.

Analysts expect crude supplies to fall by 3.5 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos, while inventories of gasoline and distillates will likely rise.

The base metals sector was ahead 6.05 per cent as copper prices also advanced, with the September contract on the Nymex up four cents at US$3.02. HudBay Minerals (TSX:HBM) was up 80 cents at C$11.70, while Quadra FNX Mining (TSX:QUX) rose 73 cents to C$10.27.

Rail stocks also advanced with Canadian Pacific Railway (TSX:CP) ahead $1.54 at $57.81.

The TSX financial sector was up 0.76 per cent following the State Street forecast, with Bank of Montreal (TSX:BMO) ahead 71 cents at $59.26 and TD Bank (TSX:TD) up 94 cents at $71.12.

Gold stocks were positive as prices for the precious metal switched direction to move higher. The August bullion contract in New York rose $3.80 to US$1,198.90 an ounce and Goldcorp Inc. (TSX:G) was ahead 50 cents at C$43.35.

The second day of bargain hunting Wednesday followed a steep TSX loss of more than four per cent last week. But traders were cautious amid growing concerns about a slowdown in the global economy.

Concerns are rooted in a string of disappointing American economic reports, including a dismal jobs report released last Friday, as well as a slowdown in Chinese growth and the European debt crisis.

"I think stocks are basically reflecting what is likely to be slower growth in the world," said Sid Mokhtari, market technician at CIBC World Markets, who also observed that a correction was widely expected after markets surged in 2009.

The TSX is currently down a bit over seven per cent from its 2010 highs registered in late April, after surging over 60 per cent from the lows of March, 2009.

"We went higher and higher with anticipating strong growth and (then) evidence started to come in suggesting that we don't have the kind of growth we're looking for and that the market is reflecting that retrenchment," Mokhtari said of the recent downturn.

New York markets also chalked up a solid advance Wednesday, led by financials in the wake of the State Street report.

The Dow Jones industrial average gained 274.66 points to 10,018.28. The Nasdaq composite index rose 65.59 points to 2,159.47, while the S&P 500 index climbed 32.21 points to 1,060.27.

Jack Ablin, chief investment officer at Harris Private Bank in Chicago, said the forecast from State Street bolstered confidence ahead of earnings for the April-June quarter. However, Ablin said he expected the bounce to be limited because so much more earnings news is yet to come.

"I don't think any investor wants to commit one way or another with the whole string of earnings announcements" due later this month, Ablin said.

In other corporate news, Rio Tinto said Aluminum Corp. of China is interested in buying a minority equity stake in Ivanhoe Mines Ltd. (TSX:IVN), or a direct interest in Ivanhoe's Oyu Tolgoi copper and gold mineral development in Mongolia. Rio Tinto, the world's third-biggest mining company, owns 29.6 per cent of Ivanhoe. Ivanhoe shares gained 68 cents to $14.55.

Shares in Lyrtech Inc. (TSXV:LTK), a worldwide leader in digital signal processing technologies, surged nine cents or 112.5 per cent to 17 cents. The company has won a two-year contract worth US$28 million to develop an intelligent motion detection module for use in exterior, commercial LED lighting systems.

Shares in New Gold Inc. (TSX:NGD) fell 69 cents to $5.39 on heavy volume of 14.2 million shares after the intermediate gold producer disclosed that a Mexican court has denied its appeal of a regulatory ruling cancelling the environmental impact statement for its Cerro San Pedro Mine.