TORONTO - The Toronto stock market put in a solid gain Tuesday for a second session in a row, led by the financial sector in the wake of an earnings report from American banking giant Goldman Sachs Group that was much better than expected.

The main S&P/TSX index closed up 94.22 points to 9,986.15 after surging 145 points on Monday following an upgrade on Goldman Sachs by influential banking analyst Meredith Whitney.

On Tuesday morning, the company said it earned US$2.72 billion, or $4.93 per share, much higher than the $3.54 analysts had expected. Its shares drifted six cents lower to US$149.38 after jumping just over five per cent Monday.

The TSX financial sector rose two per cent with Royal Bank (TSX:RY) ahead $1.36 to C$47.86 and Bank of Montreal (TSX:BMO) gained $1.20 to C$48.10.

The Canadian dollar rose 1.21 cents to 88.03 cents US, the currency's highest close since June 19, while the TSX Venture Exchange climbed 7.76 points to 1,055.39.

The Goldman Sachs report also pushed New York markets higher as the Dow Jones industrial average closed up 27.81 points to 8,359.49 after financials led a 185-point charge on Monday.

The Nasdaq composite index gained 6.52 points to 1,799.73. Dell Inc. shares ran down $1.05 to US$11.97 as the company said the U.S. personal computer market has reached its low point but that the timing of a global turnaround in the technology industry remains anyone's guess.

The S&P 500 index moved up 4.79 points to 905.84 as U.S. drug giant Johnson & Johnson handed in better than expected earnings. The company posted earnings of $3.2 billion, while also affirming its full-year outlook and its shares rose 53 cents to $58.25.

JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. are all expected to report second-quarter results later in the week.

Goldman's actual results had little impact as investors' focus quickly turned to the rest of the financial sector and what those reports might have to say about the state of the industry.

"Here we have a best-in-class sort of company reporting outstanding results," said Craig Peckham, an analyst with Jefferies & Co.

"The earnings reports we get in the financial sector from here on out quite honestly are coming from companies that just don't have the same kind of cache."

Investors also took in news that U.S. retail sales advanced in June by the largest amount in five months, led by a surge in gasoline prices and a slight rebound in the battered auto sector.

Sales rose 0.6 per cent last month, better than the 0.4 per cent gain that economists had expected.

The TSX energy sector was also supportive, up 0.8 per cent even as the August crude contract in New York moved down 17 cents to US$59.52 a barrel. Canadian Natural Resources (TSX:CNQ) gained 85 cents to C$58.04.

Prices had originally ran as high as US$61.46 a barrel, after Singapore said its economy surged an annualized, seasonally adjusted 20.4 per cent in the second quarter, adding to hopes that Asia could lead the world out of recession and fuel crude demand.

Singapore was the first major Asian country to report second-quarter gross domestic product. China, the world's third-largest economy, is scheduled to announce GDP later this week.

"The GDP numbers in China, while down substantially, are still looking ahead at maybe 7.5 per cent (growth) going out for this year," said Don Reed, president and CEO of Franklin Templeton Investments Corp.

"So when we see some of these numbers looking better and we know one of the major engines right now is Asia, we have to be cognizant of the fact that as those markets start to improve, that it's going to be a good sign for everybody else as well."

The Toronto market was also supported from higher mining stocks as other commodity prices rose.

The base metals sector rose 2.8 per cent as September copper in New York gained 7.6 cents to US$2.299 a pound. Teck Resources (TSX:TCK.B) advanced 43 cents to C$19.46 while Equinox Minerals (TSX:EQN) ran ahead 10 cents to $2.18.

The August gold contract on the Nymex rose 30 cents to US$922.80 an ounce and the gold sector was ahead 0.6 per cent. Barrick Gold Corp. (TSX:ABX) gained 51 cents to $37.38.

Shares in Vancouver-based junior miner Evolving Gold Corp. (TSXV:EVG) soared 39 cents or 86.67 per cent to 84 cents Cdn after the company reported promising drilling results at its Rattlesnake Hills gold deposit in Wyoming.

In other corporate news, Ottawa-based intellectual property company Mosaid Technologies Inc. (TSX:MSD) is suing global computer giant IBM Corp. (NYSE:IBM), alleging infringement of six patents. Mosaid shares were up a dime at $15.70.

Members of the International Association of Machinists and Aerospace Workers at Air Canada (TSX:AC.B) are voting Tuesday for a second time on a contract that would freeze their wages and pensions. They rejected the tentative contract by a razor-thin majority of 50.8 per cent earlier this month.

Air Canada needs all of its unions on board to raise money to restructure, get a pension relief plan in place and avoid bankruptcy protection. Its shares were of six cents to $1.32.

Toromont Industries Ltd. (TSX:TIH) shares declined $1.51 to $22.90 after workers at the heavy-equipment plant north of Toronto ratified a new three-year agreement after rejecting an earlier offer by the company.