TORONTO -

Bank and energy stocks led the way to a solid advance on the Toronto stock market Thursday as eurozone leaders announced a new plan to deal with the Greek government debt crisis.

The S&P/TSX composite index moved 93.47 points higher to 13,434.3 while the TSX Venture Exchange gained 21.19 points to 2,039.05.

Eurozone leaders say that, together with the International Monetary Fund, they will give Greece a second bailout worth euro109 billion (US$155 billion). But banks and other private investors will also share in the heavy lifting -- they will contribute some euro37 billion to the rescue package.

"Greece has clearly reached a point where it's not just a matter of 'Can they pay back the debt?' (but rather) 'Can they ever pay back the national debt?" said Coin Cieszynski, market analyst at CMC Markets Canada.

"And they reached a point where they need to do some sort of default to get back on their feet. And once they shore up Greece, they can start to deal with everyone else and get the contagion fears under control."

The eurozone loans will have a lower 3.5 per cent interest rate and have an average maturity of 15 years, up from 7 1/2 years in the current rescue loans.

Traders were still looking to American lawmakers to find a way to get the U.S. debt limit raised and avoid a debt default before an Aug. 2 deadline.

The Canadian dollar was on a tear, up 0.23 of a cent to 105.78 cents US, after earlier running up as high as 106.11 cents US, its highest level since late November 2007. The loonie has surged about 1.5 cents since Tuesday when the Bank of Canada indicated that interest rates will rise from their current level of one per cent. Analysts say higher rates and favourable economic conditions should keep the dollar well above parity.

"Against a background of firm commodity prices and continued global diversification flows to the relatively safe harbour of Canadian bonds, we look for the loonie to stay close to around 105 cents US even by the early part of 2012, before Fed rate hikes start to kick in," said Douglas Porter, deputy chief economist at BMO Capital Markets.

The financials sector was up 1.1 per cent with TD Bank (TSX:TD) ahead $1.01 to $80.22 while Royal Bank (TSX:RY) headed up 59 cents to $54.15.

Commodities were mixed amid data showing that Chinese manufacturing activity fell to a 28-month low in July following repeated rate hikes and other measures to cool an overheated economy. HSBC Corp.'s manufacturing index fell to 47.2 from June's 50.1 on a 100-point scale on which numbers below 50 show activity declining.

The Chinese economy has had a huge appetite for commodities, which in turn have lifted prices for oil and copper and resource stocks on the Toronto stock market.

The September crude contract on the New York Mercantile Exchange shook off early losses to move up 73 cents to US$99.13 a barrel and the energy sector rose 1.47 per cent. Suncor Energy (TSX:SU) rose 95 cents to C$39.28 while Canadian Natural Resources (TSX:CNQ) climbed 69 cents to $41.36.

Energy giant Encana Corp. (TSX:ECA) rose to a second quarter profit of $176 million, turning around a $457 million loss posted at the same time a year earlier and beating analyst expectations. Its shares slipped 18 cents to $29.65.

The base metals sector was off slightly with the September copper contract on the Nymex down five cents to US$4.38 a pound. Teck Resources (TSX:TCK.B) improved by 29 cents to $50.45 and First Quantum (TSX:FM) was down 80 cents to $139.14.

The gold sector also edged lower as bullion prices declined for a third day, down $9.90 to US$1,587 an ounce. Goldcorp Inc. (TSX:G) shed $1.19 to C$50.24 and Barrick Gold Corp. (TSX:ABX) gained 16 cents to $46.87.

In New York, the Dow Jones industrial average gained 152.5 points to 12,724.41.

The Nasdaq composite index was up 20.2 points to 2,834.43 while the S&P 500 index gained 17.96 points to 1,343.8.

In earnings news, Loblaw Companies Ltd. (TSX:L) said its second quarter earnings grew 8.8 per cent to $197 million or 70 cents per share, from $181 million or 65 cents per share a year earlier. Revenue was relatively flat at $7.28 billion, compared to $7.27 billion and its shares inched up four cents to $38.35.

Shoppers Drug Mart Corp. (TSX:SC) shares slipped 56 cents to $40.90 as it said second-quarter profit rose to $147.9 million from $146 million a year ago, driven by stronger sales of $2.39 billion.

Elsewhere on the corporate front, Express Scripts and Medco Health Solutions, the largest U.S. pharmacy benefits management companies, said they will combine in a deal worth US$29.1 billion in cash and stock.