TORONTO - Stock markets surged Thursday as the spring rally got another shot of momentum after U.S. bank Wells Fargo & Co. delivered an early profit report that easily beat analysts' expectations.

The bank said it expects first-quarter earnings at a record US$3 billion because of a strong pickup in its lending business.

"The fact that Wells Fargo can have record profits despite the troubles facing the banking system tells you something," said Rick Campagna, chief investment officer at 300 North Capital in Pasadena, Calif. "It's very good news."

The Dow Jones industrial average gained 246.27 points to 8,083.38.

Toronto's S&P/TSX composite index moved up 217.84 points to 9,187.12 despite more big job losses last month.

Statistics Canada reported the economy shed another 61,300 jobs in March as the unemployment rate hit eight per cent for the first time in seven years. That was up from 7.7 per cent in February, carrying on an accelerating jobless tide that started in October.

"We're at risk of becoming numb to what are horrific numbers on Canada's economic performance," said CIBC World Markets chief economist Avery Shenfeld.

"The 2.1 per cent employment decline in the first five months of this recession is roughly three times the pace of job losses seen at the same point in the recessions of the early 1980s and early 1990s."

Since the rally started on March 10, the main Toronto index has jumped 21.4 per cent while New York's blue chip index has soared just over 23 per cent.

The TSX Venture Exchange was up 18.27 points to 968.97 while the Canadian dollar rose 0.8 cents to 81.62 cents U.S.

A big decliner was telecom giant Telus (TSX:T). Its shares fell $3.92 or 11 per cent to $31.58 after it said its first-quarter wireless revenue will be weak after the weak economy led to a 46 per cent drop in wireless subscriber additions.

The total number of Telus wireless subscribers still rose year-over year, gaining 9.2 per cent.

The Nasdaq composite index rose 61.88 points to 1,652.54 while the S&P 500 index gained 31.4 points to 856.56.

Wells Fargo is the first bank to provide a forecast for first-quarter results and its shares soared $4.72 or 31.7 per cent to US$19.61.

The news was particularly welcome, coming ahead of a slew of American financial sector reports next week from the likes of Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co.

The Wells Fargo news boosted the Toronto financial sector almost six per cent. Manulife Financial Corp. (TSX:MFC) ran ahead $2.03 to $18.50 and Royal Bank (TSX:RY) gained $1.63 to C$39.58.

The Toronto market got extra lift from the energy sector, up 3.3 per cent as the May crude contract on the New York Mercantile Exchange rose $2.86 to US$52.24 a barrel. EnCana Corp. (TSX:ECA) gained $1.31 to $55.28 and Suncor Inc. (TSX:SU) climbed $1.50 to $32.

The telecom sector moved down 4.6 per cent following the Telus warning. Rogers Communications (TSX:RCI.B) declined $1.40 to $27 and BCE Inc. (TSX:BCE) gave back 38 cents to $25.60.

The gold sector was also a weight, down almost three per cent as the June bullion contract on the Nymex moved down $2.60 to US$883.30. Goldcorp Inc. (TSX:G) declined $1.48 to $36.15.

Wal-Mart Stores Inc., the world's largest retailer, disappointed in reporting same-store sales rose 1.4 per cent, excluding fuel sales, falling short of the 3.2 per cent rise analysts predicted. Its shares moved down $1.95 to US$50.66.

There was also a positive report on American jobless insurance claims. They rose to a seasonally adjusted 660,000 last week, slightly lower than expected.

Canwest Global Communications Corp. (TSX:CGS) shares fell half a cent to 32 cents as the media giant reported a quarterly net loss of $1.44 billion including a $1.19-billion writedown of assets, mostly in its newspapers.