TORONTO - The Toronto stock market roared ahead Thursday as investors were encouraged by the Bank of Canada's pronouncement that the recession will end this quarter and looked past sharply lower earnings from commodity sector heavyweights.

"I think what the market is telling us is that yeah, there are some blips on the horizon but a year or so from now, the global economic recovery may not be strong but it will be under way and what will lead it going forward are names like Potash, EnCana, Suncor and so on," said John Stephenson, portfolio manager at First Asset Funds Inc., "because they're going to be supplying what the world needs -- and when I say the world, I mean world demand which is Asia primarily, China."

The main S&P/TSX composite index jumped 243.33 points to 10,675.68 following two days of losses.

The Bank of Canada also projected the economy will bounce back at least twice as strongly as in the United States.

"Perhaps the most interesting feature is that the bank is now calling for modest GDP growth in the current quarter (of 1.3 per cent) and sees growth ramping up from here," said Doug Porter, deputy chief economist at BMO Capital Markets.

However, the central bank warned in its latest monetary policy report that the recovery is at best nascent and dependent on massive government stimulus and historic low interest rates.

Also, the latest Conference Board reading on consumer confidence showed respondents were more likely in July to consider making a major purchase in the coming six months than when the June index was compiled.

The Canadian dollar surged following the Bank of Canada report, rising 1.01 cents to 92.04 cents US. A higher loonie tends to be helpful for Canadians making U.S.-dollar denominated purchases but it makes exports to the United States more difficult.

Prior to the losses from earlier in the week, the market had surged about 800 points over six sessions as investors were impressed with a string of U.S. earnings that beat expectations and raised hopes for an improving economy.

Potash Corp. (TSX:POT) reported net earnings of US$187.1 million or 62 cents per share compared to year-earlier net earnings of $905.1 million or $2.82 per share on falling prices and demand.

The results fell short of the company's own projections, which had been revised downward as potash and phosphate prices fell. The company also downgraded its 2009 sales forecast .

But its shares jumped $7.09 or 7.27 per cent to $104.59 by news that Canpotex -- a marketing consortium between Potash, Mosaic Co. (NYSE:MOS) and Agrium Inc. (TSX:AGU) -- had agreed to sell 850,000 tonnes of potash to Indian buyers at $460 per tonne delivered.

"We do clearly see that the fertilizer depression is over," said PotashCorp chief executive Jim Doyle.

EnCana Corp. (TSX:ECA) shares were ahead $1.43 to $59.08 as it reported that second-quarter net earnings fell 80 per cent to $239 million or 32 cents a share, reflecting a sharp drop in oil and gas prices from a year ago. Calgary-based EnCana said that cash flow fell 25 per cent from a year ago to $2.15 billion.

Elsewhere in the energy sector, Nexen Inc. (TSX:NXY) said after the market closed Thursday that it is considering a possible sale of its natural gas and power marketing businesses. Its shares closed up 51 cents to $22.36.

On Thursday, the September crude contract on the New York Mercantile Exchange rose $1.76 to US$67.16 a barrel.

Teck Resources Ltd. (TSX:TCK.B) said Wednesday that it earned $570 million in its most recent quarter, up from $497 million a year ago even as revenue dropped. Its shares climbed $1.25 to $26.

The TSX Venture Exchange moved up 14.34 points to 1,137.79.

U.S. markets were higher on positive housing sector news and strong earnings reports from industrial giant 3M Co. and Ford Motor Co.

The Dow Jones industrial average moved 188.03 points higher to 9,069.29, rising above 9,000 for the first time since early January.

The Nasdaq composite index climbed 47.22 points to 1,973.6 while the S&P 500 index added 22.22 points to 976.29

Ford surprised the market with a second-quarter profit of US$2.3 billion due mainly to a huge gain for debt reduction.

Without special items, Ford would have lost US$424 million, or 21 cents per share. Analysts surveyed by Thomson Reuters expected a per share loss of 50 cents and its shares moved up 59 cents to US$6.97.

3M Co., which makes products including Scotch tape, asthma inhalers and film used in LCD televisions, says its second-quarter profit fell 17 per cent.

But the results beat expectations and the Dow component also raised its full-year sales and earnings forecasts. 3M shares rose $4.67 to US$69.34.

Investors were also encouraged after a bigger-than-expected jump in sales of existing homes in the United States after the National Association of Realtors says sales of previously occupied homes rose 3.6 per cent from May to June.

In other Canadian earnings news, electronics manufacturer Celestica Inc. (TSX:CLS) said Thursday it plans further cost cutting after reporting net earnings were down 87 per cent from a year ago to US$5.2 million but its shares gained 24 cents to $8.89.

Elsewhere on the TSX, the financial sector made strong headway, up 2.83 per cent with Manulife Financial (TSX:MFC) ahead $1.11 to $23.82.

September copper in New York was off 0.15 of a cent to US$2.524 a pound but the Teck report helped sent the base metals sector per cent higher. Sherritt International (TSX:S) rose 58 cents to $6.

The gold sector was 0.23 per cent lower as the August bullion contract on the Nymex gained $1.50 to US$954.80.