Surging gold stocks led the TSX higher on Tuesday. The S&P/TSX composite index closed up 48.15 points at 7,768.00.

The gold index led all gainers with an increase of 4.5%. Gold futures rose US$7.60 in New York to close at US$382 an ounce.

Barrick Gold gained $1.09 to $25.69; Placer Dome surged 85¢ to $19.42; Bema Gold added 22¢ to $4.21.

Among actively traded stocks BCE dropped 58¢ to $29.07, while Nortel added 3¢ to $6.

In earnings news, CN Rail reported its third-quarter profits rose 10%. CN shares advanced $1.95 to $74.20.

Inco reported lower profit, but still managed to beat analyst expectations. Inco shares rose 52¢ to $41.20.

In M&A news, Open Text announced the purchase of German software company Ixos for US$220 million. Open Text shares fell 74¢ to $27.62.

The junior S&P/TSX Venture composite index gained 19.57 points to close at 1,451.75.

On Wall Street, the Dow Jones industrial average fell 30.30 points to 9747.64.

The Dow was dragged lower by AT&T. AT&T was hurt by a fall in profit and it revealed that it had overstated profits by US$125 million.

Technology stocks were higher after Texas Instruments reported stronger earnings. The tech-heavy Nasdaq composite Index rose 15.76 points to 1,940.90.

The broader S&P 500 added 1.34 points to finish at 1,046.03.

The Canadian dollar closed higher against the U.S. dollar a data showed Canadian inflation nudged up in September, but market focus was squarely on Wednesday’s key Bank of Canada Monetary Policy Report.

The report will be followed by parliamentary testimony by bank Governor David Dodge.

The loonie closed at US75.97¢, up from 75.76¢ at Monday’s close.