Technology and bank stocks helped lift Bay Street while falling oil prices gave Wall Street a boost, as investors returned from the long Labour Day weekend in a generally positive mood Tuesday morning.

At midday, S&P/TSX composite index had climbed into the black; it was up 5.37 points or 0.06% to 8349.79, while the TSX Venture Exchange was down 13.39 points or 0.88% to 1514.2.

In New York, the Dow industrial average rose 71.82 points or 0.7% to 10332.02. The Nasdaq composite index moved 16.79 points or 0.91% higher at 1861.27 while the S&P 500 was up 6.42 index points or 0.58% to 1120.05.

The Canadian dollar was also up sharply, gaining more than three-quarters of a U.S. cent to US77.71 a day before the Bank of Canada is expected to raise interest rates. Most analysts are calling for a quarter-point jump to 2.25%. It would be the first time rates have gone up in 17 months.

In Toronto, the prospects of a bank-rate hike no doubt helped financial stocks. They were ahead by 0.34% with the banks all posting gains. Technology stocks were the leader, jumping 1.85%, while gold stocks were off more than 2%.

Energy stocks were down 0.78% as the price of crude oil dropped US$1.01 to US$42.98 a barrel on the New York Mercantile Exchange after the president of the Organization of Petroleum Exporting Countries said there is no shortage of oil in global markets.

New York markets moved higher after a week of low volume during the Republican national convention in New York as traders tried to put Friday’s lacklustre August payrolls report in the background.

Trading was expected to pick up after last week’s record low volume due to the Republican National Convention. However, volume was still expected to be lighter than average due to the Labor Day holiday.

Many investors were also awaiting Federal Reserve chairman Alan Greenspan’s testimony before Congress on Wednesday, where he was expected to give his view on the strength of the economic recovery. Analysts polled by Reuters on Friday were unanimous in forecasting a quarter percentage point rise that would take U.S. rates to 1.75%, as the Fed sticks to a campaign of gradual increases amid a widening economic expansion.

Wall Street saw some improvement in the retail sector, battered over the summer by lackluster consumer spending, as Wal-Mart Stores Inc. and Circuit City Stores Inc. both issued positive sales reports. However, investors were unimpressed and bid both stocks lower.

Semiconductor stocks continued to be affected by Intel Corp.’s disappointing mid-quarter update last week. Lehman Brothers cut its ratings on Intel and National Semiconductor Corp. to “equal weight” from “overweight,” citing low demand for computer chips. Intel nonetheless rose a penny to US$20.06, while National Semiconductor slipped 31¢ to US$12.86.

Overseas, Japan’s Nikkei stock average rose 0.5%. In afternoon trading, Britain’s FTSE 100 was flat, while Germany’s DAX index and France’s CAC-40 both edged 0.1% higher.