TORONTO - Commodity stocks led a solid gain on the Toronto stock market Thursday amid higher prices for crude and metals.

The S&P/TSX composite index snapped a fierce, three day losing streak that had chopped about six per cent from the main index, closing up 120.47 points to 9,773.92.

The string of triple-digit losses were sparked by worries that economic conditions don't justify sharp gains racked up by stock markets during the spring rally.

"We'll need to see some months go by before we get the kind of really positive economic news or more positive economic news that can set the stage for the next leg higher," said Avery Shenfeld, chief economist at CIBC World Markets.

"I don't think we're talking about the start of a new bear market and revisiting earlier lows. But, if we corrected, we could correct another five or 10 per cent and still be in the midst of what ends up being quite a nice longer term rally."

The battered Toronto energy sector was up 2.6 per cent as the August crude contract on the New York Mercantile Exchange edged 27 cents higher to US$60.41.

Oil had declined for the previous six sessions, taking it down from a recent high of US$73.38 on June 30 amid signals that the global economy and crude demand aren't recovering strongly from a severe slowdown.

On Wednesday, OPEC predicted that demand for crude has fallen so sharply, it will take another four years to recover to 2008 levels.

EnCana Corp. (TSX:ECA) climbed $1.07 to $53.24 while Suncor Inc. (TSX:SU) improved 85 cents to $31.30.

Shenfeld added it was not surprising to see crude fall away from those higher levels since "US$70 is our target for 2010 with the global economy providing more support."

"But for 2009, that's a bit of a stretch given the weak state of global oil demand and evidence of considerable inventories, particularly of distillate products in the U.S.," he said.

Global markets have been grinding lower over the last week after economic evidence, notably unemployment figures in the U.S. and Europe, suggested any rebound in growth could be feeble and take longer that investors expected.

The TSX is down almost nine per cent from the rally's high on June 11.

The Canadian dollar rose 0.39 of a cent to 86.04 cents U.S. amid positive housing sector news. Canada Mortgage and Housing Corp. announced that the seasonally adjusted annual rate of housing starts increased to 140,700 units in June from 130,300 units in May.

The TSX Venture Exchange was ahead 8.8 points to 1,042.82.

New York markets were listless even as Dow industrials component Alcoa Inc. (NYSE:AA) provided an encouraging start to the second quarter earnings season, turning in a smaller-than-expected loss at US$454 million. Its shares closed down 24 cents to US$9.22 in New York.

The Dow Jones industrials edged up 4.76 points to 8,183.17.

The Nasdaq composite index climbed 5.38 points to 1,752.55 while the S&P 500 index was up 3.12 points to 882.68.

Sentiment also got some lift after a report showed that China's auto sales soared 36.5 per cent in June from a year earlier to 1.14 million vehicles.

However, there was some dismal consumer news as U.S. retailers reported generally poor sales during June.

The Toronto base metals sector rose almost five per cent as the September copper contract in New York rose 7.85 cents, or 3.6 per cent, to US$2.159 a pound. Teck Resources (TSX:TCK.B) climbed 56 cents to C$18.43 while HudBay Minerals (TSX:HBM) jumped 62 cents to $7.24.

The August bullion contract on the Nymex was ahead $6.90 to US$916.20.

In other corporate news, Astral Media Inc. (TSX:ACM.A) reported quarterly net earnings from continuing operations climbed three per cent to $44.3 million or 79 cents per share despite continued weakness in advertising sales. Astral booked profits of $43.2 million or 76 cents per share during the same quarter the year before.

Quarterly revenue edged up to $232.5 million from year-earlier levels of $231.9 million and Astral shares moved 79 cents higher to $28.79.

And a day before delivering quarterly earnings data, shares in media giant Canwest Global plunged 7.5 cents or 53.57 per cent to 6.5 cents on a heavy volume of 10.1 million shares.