TORONTO - The Toronto stock market closed with a solid triple-digit gain Thursday on the back of some upbeat earnings reports and commodity prices that soared on signs of growth in Europe.

The S&P/TSX composite index added 154.43 points to 11,667.76 after a reading of the eurozone's manufacturing and service sectors showed the recovery overseas is gaining traction, and several companies pleased investors with their second-quarter results and outlook.

"I think it's a combination of the European numbers and many, many companies in the U.S. reporting better-than-expected earnings and guiding higher," said Steve Uzielli, portfolio manager and director at Scotia McLeod Equity Advisory.

"Many of the companies raised guidance relative to what expectations were, so we really think it's the guidance and the forward numbers that are the most important."

The good news out of Europe -- a major source of economic worry for investors lately -- offset new data from Statistics Canada, which showed retail sales slipped 0.2 per cent to $36 billion in May, much worse than the 0.4 per cent gain that was anticipated.

The loonie added 0.77 cent to 96.22 cents US as investors grasped at the positive developments from Europe and an increasingly rosy second-quarter earnings season south of the border to send commodities higher.

The TSX base metals sector soared four per cent as the September copper contract on the New York Mercantile Exchange climbed 7.15 cents to US$3.16 a pound, adding to an enthusiastic gain of more than eight per cent this week. Shares in Teck Resources Ltd. (TSX:TCK.B) added $1.28 or 3.6 per cent to C$36.42.

The Toronto energy sector climbed 1.5 per cent. The September crude contract on the Nymex jumped $2.74 to US$79.30 a barrel as energy producers kept an eye on a developing tropical storm that could move into the Gulf of Mexico by the weekend. Shares in Suncor Energy Inc. (TSX:SU) added 87 cents or 2.7 per cent to C$33.41.

Gold shares added 1.1 per cent as the August bullion contract climbed $3.80 to close at US$1,195.60 an ounce. Stock in Barrick Gold Corp. (TSX:ABX) added 16 cents to C$43.96.

Financials rose 1.2 per cent with shares in CIBC (TSX:CM) gaining three cents to $67.27.

The TSX Venture Exchange was up 22.86 points to 1,388.42.

In New York, the Dow Jones industrial average added 201.77 points to 10,322.30. The Nasdaq composite index was up 58.56 points at 2,245.89 while the S&P 500 index gained 24.08 points to 1,093.67.

The lift on Wall Street followed news that the eurozone's purchasing managers index, which combines data for the manufacturing and service sectors, rose to 56.6 in July from 55.6 in June. Anything above 50 indicates expansion and the higher the figure, the greater the growth.

In recent months, investors worldwide have been concerned that mounting government debt in Europe would stall a global recovery. A jump in the index is welcome relief for those predicting contraction on the continent.

On top of this, a monthly 0.7 per cent increase in British retail sales in June was a lot more than anticipated.

The strong numbers out of Europe combined with earnings from key U.S. companies to encourage Wall Street investors. Caterpillar (NYSE:CAT), 3M (NYSE:MMM), UPS (NYSE:UPS) and AT&T (NYSE:T) all topped profit forecasts and raised their outlooks.

And General Motors announced it has agreed to buy auto financier Americredit Corp. (NYSE:ACF) for US$3.5 billion.

The positive corporate developments outshone some less encouraging economic data in the United States.

The National Association of Realtors reported that U.S. home resales fell 5.1 per cent in June to a seasonally adjusted annual rate of 5.37 million.

And the U.S. Labor Department said that weekly jobless claims jumped by a more-than-expected 37,000 to 464,000 last week.

Meanwhile, the Bank of Canada said the economy is slowing much faster than previously expected. The central bank's most recent outlook stressed that it does not expect to backtrack on its current trend of boosting short-term interest rates, but also made it clear that conditions in Canada and around the world are deteriorating and risk factors are intensifying.

Second-quarter earnings also began to trickle in Thursday from some Canadian companies.

Calgary-based Precision Drilling Corp. (TSX:PD) reported a net loss of $67 million, surprising analysts who had expected a small profit. Shares in the company lost 20 cents or 2.6 per cent to C$7.60.

Forestry company Norbord Inc. (TSX:NBD) returned to profitability with net income of US$37 million as sales volumes and North American pricing improved along with a resurgence in construction activity. Shares in Norbord added $1.14 or 9.9 per cent to $12.64.

Loblaw Co. (TSX:L), the country's largest grocery store operator, said its quarterly profit of $180 million was down nearly seven per cent compared with the same time last year, but still beat analysts' expectations. Shares in the company gained 36 cents to $41.78.

Shoppers Drug Mart Corp. (TSX:SC) said its profit increased by 6.2 per cent to $145 million, with sales up five per cent. Shoppers said the earnings came before the impact of provincial drug program reforms in Ontario, Quebec and B.C., some of which came into effect July 1. Shares in Shoppers were up 10 cents to $35.60.

And Canadian convenience-store operator Alimentation Couche-Tard Inc. (TSX:ATD.A) has increased its hostile offer for U.S. retailer Casey's General Stores (Nasdaq:CASY) by 75 cents per share to US$1.9 billion including net debt. Shares in Couche-Tard added 51 cents or 2.4 per cent at $21.50.